Business Opportunities for Freelance Same Day Courier Owner Drivers

Sorry about the misleading title – there are NO ‘courier business opportunities’ on this page, just a few words of warning for anyone thinking about becoming a ‘freelance same day courier’ or a ‘courier owner driver’.

As the recession, or ‘downturn’ to put an optimistic slant on it, starts to bite, particularly in the building trade, we’re starting to see more and more new entrants to the same day courier industry. It seems an inevitable feature of every economic slowdown that the industry is swamped with out of work tradesman and redundant factory-workers, keen to put their unused van (or their redundancy payment) to use starting a new business for themselves.

It’s an easy enough business to get into, just a van and a mobile phone required. Nowadays it’s apparently not even necessary to have a collection of maps, or even any map-reading skills; just spend £75 on a satnav and you’re ready for work. That’s the theory at least.

There will no doubt be no shortage of local and national same day courier companies Read More…

Posted under Courier and Freight Exchanges, Courier Basics, Courier Business, Courier Scams

Posted by Alec at 4:02 pm, October 5, 2008

MTvan, Courier Finance Ltd & Tim Gilbert: Physician, heal thyself

It looks like Tim Gilbert has finally exposed himself as the arse that I’d always suspected he was. Tim of course is (or maybe was, who knows) head of the failed (or maybe failing, who knows) Courier Finance Ltd ’empire’, which included Speed Couriers, MTvan, CFL and some slightly dodgy-looking ‘learn how to be a courier’ websites designed to either part courier owner-drivers from their cash or to steer them towards the Mtvan website which would do the same.

Somewhat of a self-proclaimed courier industry guru, Tim is quite profuse with his advice to other, less experienced, businessmen on how they should run their same day courier businesses. Some would say that he was well qualified to give such advice, having started Speed Couriers from scratch (along with Martin Rutty) and then apparently playing his part in steering it through its troubles in 2001-02.

The collapse of OnDigital, one of Speed’s largest customers, and their foray into the home delivery market caused severe problems for the business back in 2002, so it might be expected that Tim would be more wary than most of allowing a single customer to become too important to the business, of allowing a business with no history of profitable trading to run up a significant (and Read More…

Posted under Courier and Freight Exchanges, Courier Business

Posted by Alec at 11:13 am, September 16, 2008

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Amtrak goes into administration again

I know there are a few same day courier companies who’ve been subcontracting to Amtrak who will have had their fingers burnt, yet again, on this one. A bit of homework could probably have avoided most serious losses.

Yes, Amtrak Express Parcels has gone bump for the second time in 20 months. This time it’s Netfold Ltd, the ‘white knight’ that bought the business from the administrators of Amtrak Express Parcels Limited in January 2007, that’s been put into administration.

This one caught me by surprise a bit – I predicted last summer that one of the parcel networks had less than a year to survive, but not Amtrak. As it turns out the two companies that I’d earmarked as possible contenders for the wooden spoon have both reported increasing turnover and profits, the one that I predicted would do great things this year seems to be in terminal decline and now Amtrak, acquired on presumably very good terms from the administrators, has gone into administration.

Alarm bells first started to ring in April when I noticed that Netfold Ltd had failed to file its accounts by the due date. It may seem slightly naïve of me but I’ve always held the belief that a company that doesn’t file its accounts by the due date is either suffering from incompetent management, Read More…

Posted under Courier Business

Posted by Alec at 4:29 pm, August 26, 2008

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The Growing Dangers of Late Payment for Businesses that Pay Late

In the current business climate most same day courier companies are more concerned with how quick they can collect the money due from their customers than they are with whether they pay their suppliers late. Quite often all the money coming in goes straight out to the ‘important’ creditors – fuel card company, van hire, landlord, drivers’ wages etc, leaving the ‘less important’ suppliers to wait for their overdue payments.

I’ve warned many times of the dangers of running businesses like this and it seems from anecdotal evidence that some companies are finally having to count the cost of paying their suppliers late.

With the soaring cost of fuel and the general slowdown in the economy it seems that some transport company owners have decided that it will be more profitable to cease their transport operations and concentrate on collecting the outstanding debts accumulated under the late payment legislation.

The Late Payment of Commercial Debts (Interest) Act 1998 (see http://www.payontime.co.uk for further information) gives businesses a statutory right to claim daily interest from other businesses for the late payment of commercial debt. In addition businesses have the right to a compensation payment of between £40 and £100 for each invoice which is paid later than agreed terms. If no terms are agreed then the terms default to the later of 30 days from the day the service is performed (for pre-agreed amounts) or 30 days from the date the cost is confirmed.

Both the interest and the compensation payments are chargeable on each invoice paid late, are payable on demand and are claimable up to six years after the date they become payable – i.e. up to six years after the payment becomes late. They are payable even after the initial debt has been paid in full.

Companies are potentially storing up a time bomb by paying their customers late. As an example, a courier company which carries out 5 local jobs per week for a customer over a 6 year period, each one of which is invoiced on a separate invoice and each one of which is paid late, could potentially issue a claim after 6 years for £62,400 against that one customer in late payment compensation charges alone.

If a company issues just 25 invoices each week which are paid late Read More…

Posted under Courier Business, Courier Financial Issues, Late Payment, Legal Issues

Posted by Alec at 2:34 pm, August 16, 2008

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Example VAT Invoice Template for UK Couriers

Following on from my recent post What Details Need to Appear on a VAT Invoice for Courier Services in the UK?  I thought it might be useful to supply an editable invoice template to illustrate exactly what’s needed and to maybe provide a starting point for to enable same day couriers to design their own invoices which meet all the legal and business requirements.

Download the template here (MS Excel template file) or view it as a Read More…

Posted under Accounting Systems, Courier Basics, Courier Business, VAT

Posted by Alec at 11:42 am, August 7, 2008

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What Details Need to Appear on a VAT Invoice for Courier Services in the UK?

There are strict, but thankfully very simple, rules for what needs to appear on a VAT invoice in the UK.

To satisfy HMRC you need to include on your invoice:

The date of issue of the invoice.
A sequential number that uniquely identifies the invoice.

Your business’s name, address and VAT registration number.
The name and address of your customer.
Your customer’s VAT registration number (only if they’re VAT registered in another EU country and you’re invoicing without VAT).
The date of supply of services (the date you did the work).
A description of the services supplied (from a VAT point of view ‘Courier work’ would be OK – your customer may want more detail).
The VAT rate applied (normally 17.5%).
Total amount of VAT payable.
The total amount payable for the whole invoice excluding VAT.
The total amount of VAT charged at each VAT rate (normally just one entry for the 17.5% rate).
The unit price of the services supplied and the number of units charged for – if this is normal practice for your industry (as far as I’m aware it isn’t normal practice in the courier industry) or required by your customer. In practice you can ignore this unless you charge your customer by an agreed price per mile or hour worked AND they’ve asked you to include the figure on your invoice. For example ‘200 miles @ 70p/plm’.

To satisfy Companies House and Trading Standards:

If your business trades under a name other that its actual Read More…

Posted under Accounting Systems, Courier Basics, Courier Business, Courier Financial Issues, Late Payment, VAT

Posted by Alec at 7:32 pm, August 5, 2008

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Statutory Interest and Late Payment Charges

www.payontime.co.uk

www.payontime.co.uk/doctor/doctor_main.html

The Late Payment of Commercial Debts (Interest) Act 1998 gives you the right to claim interest and compensation for late payments.

This is a statutory right – your customer doesn’t have to agree to it, you don’t have to inform them in advance that you intend to charge them if they pay late and you are not permitted to agree in advance to waive late payment fees unless a suitable alternative form of late payment penalty is agreed.

For invoices up to £999.99 you can charge £40 PER LATE INVOICE. For invoices of between £1,000.00 and £9,999.99 you can charge £70 PER INVOICE. You can also charge interest on a daily basis, currently at a rate of 13% per annum.

You don’t charge VAT on the late payment or the interest and you don’t charge the late payment fee on a recurring basis.

You don’t HAVE to charge the late payment fee but unless you’ve specifically agreed to waive the fee the late payer still owes it to you EVEN AFTER THEY’VE PAID THE ORIGINAL DEBT. The Read More…

Posted under Courier Basics, Courier Business, Courier Financial Issues, Late Payment, Legal Issues

Posted by Alec at 5:19 pm, August 2, 2008

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Karoshi – Occupational Sudden Death

Karoshi is a Japanese word which is literally translated as “death from overwork”. It generally refers to sudden deaths by stroke or heart attack caused by work-related stress.

In 2006 a 45-year-old Toyota employee died, apparently from working less than 20 hours overtime per week in the run up to launching a new product.

His death has now been classed as an industrial injury, meaning that his family can claim against his employers’ insurances.

60 hours per week is classed as a short week by many in the UK same day courier industry. While HGV drivers are limited by law to 48 hours work a week and any employed workers can insist on working a maximum of 48 hours per week with 5 weeks holiday per year, many courier owner-drivers and courier company owner-managers work in excess of 70 hours per week with few if any holidays.

For the working man, doing his best to provide for his family, is it not better to have a few more years to spend with the family, rather than a few extra quid each year and an early death? Life is apparently a journey, not a destination.

(Written by me, working at 1837 on a Saturday evening)

Posted under Courier Basics, Courier Business, Drivers' Hours, Employment

Posted by Alec at 6:37 pm, July 19, 2008