Copper coins – Is this the end?
Chancellor Philip Hammond announced the fate of 1p and 2p coins……… The result of the review concerning the coins has been announced and for the moment the Treasury has decided the coins are staying.
End of copper coins?
Chancellor Philip Hammond announced the fate of 1p and 2p copper coins. This comes a year after the Treasury’s spring statement announced that they were obsolete and could be phased out. The result of the review concerning the coins has been announced and for the moment the Treasury has decided the coins are staying.
A consultation into the use of cash was announced last year as we increasingly move into a digital economic age. The review found that up to 60% of copper coins were used just once before being placed into saving jars, while 8% of these coins were thrown away. This all comes at a cost to the Treasury because they have to produce in excess of 500 million 1p and 2p coins to replace those that fall out of circulation. Is this a price worth paying when so little value appears to be attached to them by the public?
The government was nervous about stating that the coins will be removed, Theresa May backtracked after the announcement last year and David Cameron blocked earlier suggestions from George Osbourne for fear of a public backlash. The main opposition is that there will be price increase with retailers rounding up their prices, however research from the Bank of England has stated that the overwhelming weight of literature and experience indicates that there will be significant increase in prices. For people paying electronically there would be no need for any prices to change, and for cash transactions retailers could round up or down to the nearest available denomination. There are many countries who have implemented this system and not experienced inflation.
For businesses the move towards the digital economy means that some of the old excuses for not paying – the cheque is in the post! – are being rendered obsolete. Digital payments and bank transfers are now the norm, but the ease of making a payment does not necessarily equate with your business receiving that payment in a timely manner.
Liquidity in any business is paramount, if there is no (digital) cash flow a business can find itself in serious trouble. A lack of finances also restricts a businesses’ ability to grow, employ more people, invest in new technology and innovate. All of this has a knock-on effect for the local and wider economy. The fact is, a lot of businesses do not have the time, resources or expertise to chase late payments or recover debts. Many businesses are uncomfortable about doing this because they do not want to damage the relationship they have with their customer and jeopardise any future business. This is where having excellent credit control systems in place can really help businesses to manage their finances and re-invest in their business.
Talk to us
At Daniels Silverman, we understand that every business if different and take the time to get to know our clients and understand their business relationships. We understand that recovering a debt or late payment should never cost you the relationship with your customer. We tailor all of our debt solutions and credit control services to meet the needs of each client and work alongside you, as part of your team, to ensure that you are paid on time for your goods or services. We value your reputation and do all we can to protect that with our trained and experienced team working hard in a polite and friendly manner to give reminders when invoices are coming due.
If you have any concerns regarding consistently late payments of invoices or invoices that have turned into debt, why not give us a call? We’ll do everything we can to help in a professional and ethical manner. Or log onto our website where you can chat to one of our advisors now to find a way forward.