eurokid started this topic @ 12:05 on 15/04/2005
Hi,
I was wondering if any of you guys had any ideas about this one.
We set up a limited company selling hair care products a few months ago. The problem is we currently use worldpay and they make us wait 35 days for payment. With items costing £90 a piece this soon adds up. We went to RBS streamline who said that the company was to new to give a full merchant account to.
My mother owns a company with a T/O of around 2 milllion a year and she said she would help if she could but does not want to be involved in running the company. My question is do you think if she became a director it would help us get the full merchant facility etc even if she is not that involved?
Also anyone know any good accountants that deals in Scotland?
Thanks
RE: Company Directors
Jonny | 15/04/2005 01:27 PM
We had exactly the same issue when we set up.
Kills your cashflow huh?
We were with Barclaycard Merchant Services who made us wait 3 MONTHS!!
What we did was switch to and set up our internet merchant account with our bank, HSBC, who clear the funds within 2/3 days for us. The logic being that as our bankers it is easy for them to access our bank account should the need arise. The other advantage to us apart from the speed is we were able to negotiate much lower transaction charges too than we had been previously paying.
Afraid I can't help as to whether involviing your monther woudl be of benefit. I suspect not as you are a limited company and therefore the biz is a separate entity. Just my thoughts though!
J
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RE: Company Directors
James Smith | 15/04/2005 05:23 PM
Worldpay can be beaten back some on the retention period, but it can be a hard battle, and the best I have seen is around 21 days.
Generally speaking you need a good 12 months trading before getting a proper merchant account in your own right.
Your mother being a director probably wont help very much, her company giving some form of guarantee just might, especially if it is the same bank her company uses and she has a good relationship with them. Certainly worth a question to the bank. Alternatively perhaps you could use your mother's company to process the payments a small fee (ie their merchant account not yours), and then remit the funds to you. This might need some hard thinking about from a legal point of view. Or she might simply be able to finance your cash flow for a while until you find your feet which would probably be a lot easier all round.
I deal with company’s across the UK on a remote basis if you need a chat about your accounting requirements, please feel free to give me a call to discuss remote working.
Regards,
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James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773
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Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT
RE: RE: Company Directors
Babylon | 16/04/2005 09:20 AM
I agree with the comments above in general. However, if you decide to use your mother's merchant account please ensure that your customers are made fully aware of this fact when they pay. I don't think there are any major legal issues as we know of companies who use the merchant account of someone elses. In fact, we provide such a facility to one of our clients for whom we provide trade finance facilities. By using our merchant account, they were able to significantly reduce their financing costs and turnaround time.
The main problem to overcome would be when your customers receive their credit card statements, they would see your mother's company name instead of yours. Some folks at this stage without realising ring-up their credit card companies and tell them that they have a transaction on their statement which they don't recognise. At this stage, the credit card companies put a stop on the payment until you prove the legitimacy of the transaction.
Regards,
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Interested in competitive Asset">href="http://www.babylonbusinessfinance.com">Asset Finance, Trade Finance and Equipment Leasing Solutions?
Babylon Business Finance
RE: Company Directors
Kalnet4u | 18/04/2005 01:41 PM
Worldpay will reduce the amount of time they hold onto the cash for once you have a history with them and a low level of chargebacks/refunds. We had our account reviewd some time back and now only wait 14 days.
It can be done but waiting the four weeks initially can be a pain. Have you tried asking your bank for an overdraft to cover the WorldPay cashflow situation? If you show the bank your WorldPay statements it should put you in good stead for an overdraft or increase in an existing limit.
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Jamie
www.TamarTelecommunications.co.uk">href="http://www.TamarTelecommunications.co.uk">www.TamarTelecommunications.co.uk
