Company accounts overdue

[Kelvin]

I’m due to make a large final payment for some goods (kitchen) that the company will store for me until I need them in a few months. They’ve sent me pictures of the kitchen with my name on it and the order number. I checked their accounts on Companies House and noticed that their accounts for the last financial year are overdue. My view is this is a bit of a red flag particularly given the current financial situation. Consequently I’ve emailed them to advise I won’t pay the final amount until their accounts are filed. I suspect they might have something to say about this tomorrow when they get my email. What would you do in this situation? 

Edited April 10, 2023 by Kelvin

[Nickfromwales]

1 minute ago, Kelvin said:

I’m due to make a large final payment for some goods (kitchen) that the company will store for me until I need them in a few months. They’ve sent me pictures of the kitchen with my name on it and the order number. I checked their accounts on Companies House and noticed that their accounts for the last financial year are overdue. My view is this is a bit of a red flag particularly given the current financial situation. Consequently I’ve emailed them to advise I won’t pay the final amount until their accounts are filed. I suspect they might have something to say about this tomorrow when they get my email. What would you do in this situation? 

Do as your doing. Ask questions, you're bloody well entitled to!! It's your money, and you need to be sure before you part with it.

Simply explain your concerns, and let them respond accordingly. Only you can decide how you then proceed.

[nod]

Definitely a red flag 

If they are last years accounts the fines will probably be more than the cost of your kitchen 

 

Ours ran over by a couple of days one year and we were fined £240 for those two days 

[SteamyTea]

You have done the right thing, twice.

Always worth five minutes checking Companies House.

You can track directors as well, see if they have a history of insolvency.

[bassanclan]

Make sure at least£100 is now paid by credit card, even if you've previously paid it by debit card or bank transfer

[Kelvin]

The £1000 deposit was on a credit card. 

[patp]

If they don't trust you to pay on delivery then don't trust them to take your money before delivery.

[Kelvin]

The other thing I noticed is that one of the directors has recently registered (January) a new kitchen company at the same address. 

[Moonshine]

10 minutes ago, Kelvin said:

The other thing I noticed is that one of the directors has recently registered (January) a new kitchen company at the same address. 

 

yeah that's another red flag

[joth]

8 hours ago, Kelvin said:

They’ve sent me pictures of the kitchen with my name on it and the order number.

Did you ask them for this? If they did this spontaneously unprompted, it'd be another red (or at least orange) flag for me.

 

[Kelvin]

I asked them for them a while back as soon as the kitchen arrived in their warehouse. 

[Susie]

I would ask about the new company they have registered. It does sound odd. Only innocent reason I can think if they are splitting company supply and fitting. 
how late are the accounts for fileing if you PM me the company I can do a credit check if you want. 
name, company number, address inc postcode. 

[Sparrowhawk]

Coming from a family of accountants there are innocent(ish) reasons accounts can be late. The company can be totally disorganised and not submit their books by the deadline, so the accounts are late. They are ill or don't get round to signing them. Or their accountants are **** and don't get things done on time.

 

All are minor red flags around competence but not "OMG they're going to rip me off" level. But. That second company could well be. It depends how large and profitable they are. Are they trying something probably-illegal to avoid the corporation tax rise by splitting profits between two companies?

 

Back to the original issue. Is your build secure and weathertight enough to store the kitchen on-site?

[Kelvin]

8 minutes ago, Susie said:

I would ask about the new company they have registered. It does sound odd. Only innocent reason I can think if they are splitting company supply and fitting. 
how late are the accounts for fileing if you PM me the company I can do a credit check if you want. 
name, company number, address inc postcode. 

PMd thank you. 

[Kelvin]

The house is just the foundations. It gets erected next week. The garage ought to be erected this week but can’t get a hold of them to confirm which day they are starting. I suspect the wind might delay that! 

[SteamyTea]

We need @ToughButterCup to make up one of his tedious, but useful, checklists about checking up on companies.

We wants/needs something to do now he has finished his build.

 

@Susie and @Kelvin

Let us know the outcome. No need to name the company, but it may show if a credit check is worth paying for.

 

I used to know a girl in the 1980s who had a brother that was almost as good as mathematics as she was.

She decided that short skirts, vodka and children from unsuitable sperm suppliers was a good way forward in life.

Her brother, he went off to university (on of the Cambridge ones) studied mathematics, got his Master's and became an accurary for an insurance company.

He said that it was dead easy if you have the information to calculate the odds, easier than bringing up children, and you get paid £100k a year for it.

Now I know why insuring against financial risk is expensive, not the risk, it is the salaries paid to the staff.

 

[ToughButterCup]

5 minutes ago, SteamyTea said:

We need @ToughButterCup to make up one of his tedious, but useful, checklists about checking up on companies.

We wants/needs something to do now he has finished his build.

...

 

OK.

I'll start a thread with the basics of Due Diligence, and then everyone can chip in to add their own bits of wisdom. Then I'll summarise it into a checklist and ask the Mods to pin it when done.

Ian

I've got loads of niggles to sort on the house yet, like MVHR, Part P, and finishing of  the 'that'll-have-to-do-for-now' list

Quite apart from mending two new hips.

 

But hey I put my own socks on for the first time this morning. Nurse is only visiting once a week now.  

 

And before you release too many testosterone molecules @SteamyTea , think Divine Comedy,  National Express

'... of a small country...'

 

[nod]

1 hour ago, Kelvin said:

The other thing I noticed is that one of the directors has recently registered (January) a new kitchen company at the same address. 

I think you have answered your original question 

[SteamyTea]

Just now, ToughButterCup said:

OK.

I'll start a thread with the basics of Due Diligence

What was that, I fell asleep.

Or was it distracted by a raindrop on the cafe window.

[Alan Ambrose]

@Kelvin

 

Firstly I don't get this tendency to protect identities - especially of potential miscreants. Sure, for libel reasons, keep to the facts and your opinions - just keep your personal slagging off of individuals to yourself for the time being.

 

By identifying them, you may well be helping some other BH community member from getting shafted. Also, IMO there's nothing like transparency to reduce the level of dodgy dealing.

 

Second - also check the cash/sales/profit/capital trends over the last few years. Bear in mind that the accounts may well be 9 months or so old. If those are on a downward trend and there's very little cash and negative retained earnings, you're probably looking at something that's not going to stay around. Post the name up and we can show examples of what figures we're looking at from Companies house.

 

Lastly, I don't think that it's impossible that BH members could design some kind of escrow / staged payment / contract scheme to use with suppliers.

[Susie]

Short summary of company in question 

incorporated 1986

last return made 31/12/22

accounts filed 31/3/22

made up to 30/6/22

 

credit rating 7/4/22 60 good credit worthiness similar since 2018

limit £120,000 7/4/22 increase most years since 2018 when it was £83000

 

no current CCJs

 

last accounts covered 15 months moved away from HMRC year end by 3 months. first time they had accounts audited 

 

 

 

 

[Mr Punter]

Regarding late accounts, we used to have an accountant who frequently filed our accounts and companies house returns late and although he covered the fines it was very annoying but not anything to do with our solvency.

 

My instinct is you will get the kitchen.

[Kelvin]

@Alan Ambrose I’ve not mentioned the company simply because I don’t know if there’s an issue or not yet. Once I am more sure of the situation I’ll post up the name. They are well financed based on the last set of accounts. I checked all this last year before going with them and there was no cause for concern.  It was just the fact that their accounts are overdue that caught my eye and they have recently set up this new company. My instinct is they are fine. 

[Alan Ambrose]

>>> I’ve not mentioned the company

 

I see that - but what are you gaining by that? That late accounts thing is a simple fact, so it's not as if you're committing libel. What we are losing is (a) other BH members won't have the information to potentially protect themselves and (b) you might be missing out on other BH member's experiences. Somebody might be able to say 'we just had a kitchen from them and it was great' etc and put you at a bit more ease - they can't do that if we don't know who on earth you're talking about. Also, it makes the thread all a bit theoretical and uninteresting if you're just telling us that 'some company somewhere hasn't filed its accounts'

 

I'm not picking on you - this seems to be normal behavior here, but I'm suggesting that this kind of behaviour isn't in the overall community's interest.

[SteamyTea]

1 hour ago, Alan Ambrose said:

Lastly, I don't think that it's impossible that BH members could design some kind of escrow / staged payment / contract scheme to use with suppliers.

It is the kind of thig that banks should be offering, but not at 20% of the contract price.

Maybe 0.3% plus a one off set up charge.