Grant Thornton launches Financial Crime and Disputes

12 August 2014 Consultancy.uk

Accounting and consulting firm Grant Thornton has last month announced the launch of a new dedicated Financial Crime and Disputes team in the UK. The new practice area will be part of the Forensic Investigation and Recovery team, working closely alongside the Financial Services Advisory Group.

Over the past years, the volume and cost of financial crime has – mainly as a result of the increasing digitisation and professionalisation of cyber criminals – strongly increased. In particular the financial services market and other sectors that are typically vulnerable to fraud, such as retail, are severely impacted by financial crime. As a result, the topic has rapidly developed into one of the key disciplines for management teams across the globe. “Financial crime remains one of the key agenda points for regulators, enforcement agencies and financial institutions across the world. The increasing pressure of regulation and enforcement, set against a dynamically changing financial services market, means that all manner of financial institutions - and many other industry sectors too - are exposed to financial crime risk," says Marcus McCaffrey, Partner and Head of Financial Crime and Disputes at Grant Thornton in the UK.

Grant Thornton - Financial Crime

Against this backdrop, the demand for advisory and support services in the field has lately grown steeply; according to analyst firm Kennedy, Digital Forensics belongs to one of the fastest growing segments within the consulting industry. For Grant Thornton, one of the larger professional services firms in the market, the combination of client demand and attractive market conditions left the firm with an easy decision to make. As of last month it has launched a dedicated Financial Crime and Disputes practice, aimed at helping clients in the financial services sector with mitigating and remediating issues relating to financial crime and complex disputes. The new unit draws on Grant Thornton’s existing experience in forensic and investigation services and international capabilities available within the firm.

Peter Allen, Partner and Head of Financial Services Advisory at Grant Thornton, comments: “This is an important step forward in further building our comprehensive offer to the financial services market and addressing the financial crime and disputes concerns of our clients. Feedback from the market so far has been extremely positive and we're confident the team will help continue to drive the fantastic growth we've experienced over the past few years, whilst further enhancing the firm's reputation for, and experience in, developing the innovative, best-in-class client solutions our clients require.”

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Late payment culture cripples productivity of SMEs

29 March 2019 Consultancy.uk

UK SMEs are seeing their efforts to grow stifled by late payments, causing thousands to enter insolvency proceedings each year. According to experts from Duff & Phelps, this also has a major impact on the UK’s economy, meaning late payment culture must be tackled if the country is to dodge yet more economic stagnation in the shadow of Brexit.

Small and mid-sized enterprises in the UK face a myriad of pressures at present. Brexit anxieties are keenly felt by SMEs, with more than nine in 10 suggesting recently that economic conditions have worsened in the last 12 months. 66% of SME leaders also expect conditions to further worsen in the coming year.

At the same time, firms are keen to see value for money from investing in external expertise. Consulting fees which weight much more heavily on smaller firms, who spend £60 billion per year on professional services, but feel that more than £12 billion of that figure is wasted on unnecessary or bad advice.

Late payment culture cripples productivity of SMEs

Above all, however, SMEs are extremely vulnerable to late payments, and, according to a new study, the situation is only getting worse at present. According to corporate rescue consultancy Duff & Phelps, small businesses in the UK are facing a collective bill of £6.7 billion per annum due to late payments by other companies, while the average value of each late payment now stands at £6,142. This has risen from £2.6 billion in 2017, illustrating the plight of SMEs, particularly with uncertain economic times ahead.

Indeed, the spike in late payments has already caused significant productivity issues for SMEs, which in turn compromises their financial stability. With staff wasting hours chasing down late payments and businesses becoming preoccupied with short-term cash flow problems, they are less able to concentrate on creating new value for the firm, which in many cases gradually slides toward insolvency.

Small businesses across the UK are facing major cash flow pressure, leading to increased financial instability as a direct result of a late payments culture. This is likely a big driver of the UK’s 20% boom in insolvencies over the last three years, especially as it has a knock-on effect on other SMEs within the supply chain of those struggling firms. Approximately 50,000 small businesses fail each year because of late payments, amounting to a shortfall of more than £2.5 billion for the UK economy. 

Commenting on the findings, Paul Williams, Managing Director, Duff & Phelps, said, “In this modern era of technology, which is designed to enable business agility, late payments are particularly galling as there are no excuses. The day of the ‘cheque is in the post’ is long over!... More can be done to avoid businesses reaching this situation in the first place. SMEs underpin the economy, so prioritising timely payments will help allow business owners to focus their time and energy on providing good quality products and services and adding value to the customer experience, rather than chasing outstanding payments.”

The UK Government currently promotes its voluntary Prompt Payment Code to encourage good practice, but late payments by larger companies remain a common pain point for many SMEs. There may be hope for an end to late payments, however, following an announcement in the Spring Statement from Chancellor Philip Hammond. The Government aims to crack down on the practice, with Hammond stating big companies should hire a Non-Executive Director to be responsible for reducing late payments to small suppliers. The statement also advises that organizations publish payment practices in their annual reports.