INTRODUCTORY GUIDE

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About Red Flag AlertRed Flag Alert is a database containing over 13 million records on every business in the UK, from the sole trader through to limited and quoted companies. We help business owners and their professional advisers to use data intelligently to make better business decisions. Better decisions about the market they trade in, the people they sell to and the relationships with clients and suppliers that they have. We call this doing better business and we can help in lots of different ways.

Founded in 2003, Red Flag Alert started life as part of the Begbies Traynor Group, which is still a shareholder in the business. It covers all aspects of business activity enabling you to monitor the performance of competitors, suppliers and customers.

A unique aspect of Red Flag Alert is its ability to perform within key business functions: sales, credit control, collection, risk and compliance and, therefore, it covers the life cycle of your customers and suppliers.

The database includes up to five years profit and loss account and balance sheet information, details of directorships, company secretaries and shareholders, legal notices, bank and debenture information.

The database also contains full Gazette information on all UK insolvencies, enabling you to keep track of a company and any payments you may be due from your insolvency claim.

Red Flag Alert also has the capacity to generate demographic and sector profiling to help improve your sales and marketing activity, with the added knowledge that the financial health of the prospect is being assessed.

Key Benefits Minimises the risk of financial losses.

Protects your business from bad debts and failing suppliers.

Real time warnings on your customers and suppliers to promote healthier and more profitable relationships.

Identifies opportunities to grow and to win healthy new business.

Web-based business solutions, including direct email notifications and warnings.

Simple integration into existing processes and platforms.

Credit Limit Calculator.

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The Sales DatabaseRed Flag Alert enables you to undertake demographic and sector searches to generate profiles of suitable potential customers for your business. The health ratings clearly identify potentially good businesses, which helps focus your new sales activities.

The Credit Control DatabaseA vital element of Credit Control is proactive risk management. Red Flag Alert provides key functions that can assist your business in this area.

Health Reports: In conjunction with our trusted data providers Red Flag Alert delivers accurate and relevant reports, containing full details on a business and its creditworthiness, thus giving you more confidence to make quick and informed decisions.

Credit Monitoring System: A fully automated service, which generates a real time email direct to you when a Significant or Critical Action takes place in relation to a customer or supplier.

Any number of limited and non-limited companies can be loaded onto Red Flag Alert credit monitoring. The email alert notifies you of the particulars in question, enabling you to react swiftly and positively to any credit, collection, compliance or sales issue.

Significant Actions

Late accounts

Resigning directors

Changes in address

CCJs of up to £5,000

Noticeable changes to credit limit

Critical Actions

CCJs £5,000 and over

A series of CCJs accruing to over £5,000

High Court Writs

Winding-Up Petitions

Critical change to Credit Limit

Director disqualification

Bankruptcy

Reports and Information The Red Flag Alert report contains the following comprehensive information (where available):

Business identity, company status, health rating, key financials, adverse actions, Companies House, family tree, advisors, legal charges and officers.

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The Health Rating SystemGOLD: Companies will be healthy and will have traded for a number of years; they will have financially sound accounts, good payment history and few or no legal notices.

SILVER: A stable and healthy company, which may have traded for a smaller number of years; they will have financially stable accounts, good payment history and few if any legal notices.

BRONZE: May not have published accounts or are a newly formed company; if accounts are available they would indicate that this business is an average risk with standard payment history and possible legal notices.

AMBER: Businesses that have passed the lower threshold of the credit score algorithms and are either very new or display some financial, payment or filing

characteristics that make them an elevated risk. They should be treated cautiously and all monitoring notices reviewed carefully.

1 RED FLAG: We recommend you monitor the company due to the detrimental data currently against them. They may have good accounts and standard or poor payment history.

2 RED FLAGS: Serious detrimental data has been identified and close monitoring is suggested. They may still have good accounts and standard or poor payment history.

3 RED FLAGS: Serious detrimental data has been detected and a full review of their account status and close monitoring is recommended.

INSOLVENCY FLAG: Company has undergone some form of Insolvency; please check the full record.

NOT TRADING: This simply indicates that according to information filed at Companies House the company had a non-trading status. Should credit be sought in the name of the company care should be taken and a full disclosure sought.

DISSOLVED: This company has been dissolved by Companies House and no longer exists. Should you be trading with a company in this name you should 1) review your situation immediately, 2) obtain a full disclosure of affairs before entering into any further transactions and 3) ensure you are trading with the correct company going forward.

BUSINESS DISCONTINUED: This business has been discontinued.

Supporting Key Business DecisionsMaking business decisions is never easy when also undertaking routine management in a risk-averse environment and especially against the background of a challenging economic climate.

A basic calculation most banks and finance companies use is to look at the amounts that will be owed to you over a three-month period. If anything catastrophic were to happen to this company could your cash flow handle the loss of these three payments? The effect of losing a contract could impact on your business for a period of time or until replaced by new business.

Ensure you communicate with your customer, you should know the registered address and trading address and where necessary ask for suitable references.

Red Flag Alert cannot and will not replace the extensive knowledge you and your team have built up on your marketplace and client base or supplier network. However, it can enhance how you operate on a day-to-day basis and ultimately improve your bottom line.

Red Flag Alert has been designed and built with your requirements in mind. It uses the most up-to-date information available and provides you with a simple to use solution.

Using Red Flag Alert will help you identify relevant and profitable new business, reduce bad debt and defaults and improve process management.

Follow this simple checklist:

Know your customer

Turnover and size of business

Rating and its meaning

Impact of loss

Non Limited ChecksTake a Red Flag Alert Report and where necessary obtain references, verify these references via Red Flag Alert and ensure you are speaking to the principal business owner or proprietor.

Statistics and AnalysisQuarterly reports issued to UK professional and media contacts are also available, free of charge, to subscribers of the system on request. Analysis of the database defines adverse actions as ‘Significant’ or ‘Critical’. Results are then split by industry sector and region to present a view of areas of the economy that may be most at risk of failure.

Bespoke reports, tailored to subscribers’ needs, can be produced for an additional fee; costs depend on the complexity and regularity of analysis required.

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Monitor AlertsIt is crucial that you are notified of changes to your customer/supplier status as they happen, in order to minimise your exposure to risk. The Red Flag Alerts real time email facility will warn you of these changes giving you the intelligence to prioritise your actions.

Red Flag Alert provides accurate and up-to-date information to support good business decisions. Below is a list of the major alerts, what they mean and the significance to your business.

Petition Notification: A petition is generally issued when a large debt is outstanding and no effort has been made to reach a reasonable settlement. The actual debt is not in dispute and time outstanding can be anywhere between three to six months by the time of the hearing. Extreme caution is advised.

High Court Writ: Is enforced by the High Court with associated penalties being much higher than those imposed by a CCJ. Extreme caution is advised.

County Court Judgment >£5,000 or Multiples thereof: In this case, a large one-off CCJ has been issued or in a period of three consecutive months multiple CCJs have been issued; with either of these alerts it still remains a significant action and caution is advised.

County Court Judgment <£4,999: With the onset of a court proceeding against any company, caution is always advised as there must have been a reason for the CCJ. We would advise that sometimes these debts can be in dispute and both parties may feel they are right. Caution is advised, but early action on your part should avoid a bad debt.

Director Disqualification: This serious action is taken by the secretary of state via the courts when they have evidence of serious malpractice or fraud. Immediate qualification of your business relationship is required.

Director Change: A strong indication, alongside other issues, that a company is facing insolvency issues. If a past director performance indicates a trend to insolvency, caution should be used and a request for prompt payment made.

Striking Off Notice: Companies House registers this notice if, for a period of time, it has received no notifications from the company of its accounts and returns.

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Further InformationContact: info@redflagalert.com or call 0844 412 6699

Manchester Office: 340 Deansgate, Manchester, M3 4LYLondon Office: 31st Floor, 40 Bank Street, Canary Wharf, London, E14 5NR

Office LocationsRed Flag Alert have offices throughout the UK; visit our website for further information.

Critical Changes to Credit Limit: Changes in limits will often be an early indication of adverse changes in the company’s position, which could be linked to legal and payment history.

Insolvent Accounts: Often an early sign of the changing position of a company. Although many have bounced back from a bad year of trading you should always use caution and track payments carefully.

Other Red Flag Alerts include:

The registered name has changed

The business address has been changed

Late accounts have been filed

Many other alerts are also available

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Ref: RFA 1327/05.15

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