GFTM- Why?
If you deal with a large, publicly listed company, it is relatively easy to know how they are doing. A quick Google search can usually tell you whether things are going well, or potentially not so well. That does not mean to say that fingers cannot be burnt—take Carillion back in 2018. But for any small business, dealing with a large, listed company is usually a safe(r) bet.
But the UK has 5.5 million businesses, and 99.9% of these are not listed. So, the chances are if you are an SME, small or micro business, you are going to be dealing with another SME, small or micro business. And finding out whether it is safe to deal with these companies is not so easy.
Credit rating agencies (such as Red Flag, who we use) are normally utterly reliant on Companies House data. However, there is one glaring problem with this. Companies House data is out of date, usually by many, many months. So if a company has a year end on 30 June, accounts for that period do not need to be filed until the following 31 March. And then nothing needs to be filed for another year. Potentially, on 30 March 2025, the only publicly available data on a company will be for the year ending 30 June 2023. A lot can change in that period.
And then, of course, there are the fly-by-night companies. The ones that can spring up, grab as much credit as they can from suppliers, be all smiles and cheery greetings when they are getting goods and services for free, and then disappear. These can come and go before anything even is filed.
And all of this assumes that those accounts filed at Companies House are genuine. I know it is illegal to file false accounts, but no one is actually checking. Perhaps that large debtor balance in the accounts (which is giving you that warm glow of comfort) is actually a Director’s loan from the company, which the director has taken out and in reality has no intention of ever paying back.
Which brings us onto GFTM. For about 14 years, I worked as an FD for a small London-based recruitment company specializing in Construction. I would have consultants getting all excited about placing five site engineers, and we would all get excited about the margins, the profits, and the celebrations down the pub on a new client. For weeks, everything would go well, and then eventually we would be hitting the limit on the factoring company's credit limit (this was going back some time when it appeared they just threw money at you). And then I would call, politely asking for some payment. Of course, the director is away but will be able to authorise the following week. The next week, a call would be made again politely asking for payment. Just in a meeting, he will call back after lunch. Lunch came, the afternoon went, and no call. This would go on for days; meanwhile, five site engineers were needing £5,000 of payment a week. The factoring company would stop funding invoices, and those five site engineers with their signed timesheets needing payment would be eating into the company’s cash. And eventually, a decision needs to be made: do we risk putting in the workers, or do we pull them off-site and have the client threatening to take their business elsewhere?
This happened more times than I would care to mention, and then a few months later, it would turn out that we were not the only people that this company had tried it on with. There were several, all with the same story. Yet there was no way that we could communicate this. Certainly not to other companies in the same sector fighting over a limited number of clients, and all of us keen to make more and more money.
So this is where Good For The Money started. I originally had the idea in 2011, but this was before cloud accounting and AI. What we have developed here is a way of sharing data to everyone’s advantage, and hopefully with no downside. And it’s FREE. (No, we are not a charity, and we do aim to be profit-making, which I will address in another blog. At some point, we aim to get investment…). But by using GFTM, you will help identify those companies that are not going to pay you, in whatever sector you are in. This platform allows suppliers to weed out the bad agents, the companies that do not want to or are unable to pay, and hopefully serves as a reminder to all clients of their obligations to pay suppliers on time. Because this is what any supplier wants: clients buying goods, on credit, who are all Good For The Money.
