Even Sir Fred Goodwin’s new firm has cash flow problems

RMJM the Edinburgh based global architecture giant behind the Scottish Parliament and ranked the 5th largest architectural firm in the world has admitted cash flow problems resulting in wages being paid late over the past 12 months which is believed to have created an exodus of senior staff.

When quizzed by press, an RMJM spokesman, refused to confirm whether the payment problems were linked to changes in the way the company collected fees, implement after the appointment of former RBS chief Sir Fred Goodwin as an adviser to the firm.

It was revealed recently that government officials in the Emirate State of Dubai had visited the firm’s office in the oil-rich emirate over delayed wage payments during the past year, and that police have questioned staff as it is illegal in Dubai to issue bounced cheques. Barry Shapiro, the RMJM director for Asia, is understood to have stepped down and a further 80 staff are believed to have quit the Hong Kong office in recent weeks according top press.

The RMJM spokesman said: “Like other architectural companies, cash management is a vital component. There is a significant sum of money owed and we are currently trying to get this sorted out.” He added: “As a result of cash flow pressures, a significant client is behind on its payment schedule and we are in negotiations to have that brought up to date. That in turn has caused cash flow issues, putting us in a similar position to many of our competitors in the region.”

The global construction industry is indeed in a state of flux, and it is thought that although there are some winners coming through the global downturn intact (albeit with some battle scars and higher debt recovery bills) there will be much consolidation in the industry over the next 2-3 years as struggling firms get bought up for their assets by the winners of the recession.

RMJM are  typical of any firm operating in the global market that has found the cross border differences in currencies, languages, laws and customs only compounding the issue of late payment further. As for many of Corporate Credit Debt Recovery’s international clients, there are a multitude of debt solutions available to them from a competent collection agency able to advise and implement a whole host of services from ongoing business reports and credit outsourcing services to debt collection and debt recovery.

Cash flow problems are a killer of businesses small and large, national and international so if any of the issues highlighted in this debt focus blog post are of a concern to you, get in touch and start reducing your debtor days.

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