Supply chain disruption, rising energy costs and higher interest rates are enough for any business to cope with in the current climate, so bad debt is the last thing any business needs. However, it is a real danger and risk to businesses right now. Registered company insolvencies increased by 17.5 per cent year-on-year to 1,783 in February, according to figures from the Insolvency Service*.
Have you ever considered how your business would cope if cashflow was affected due to late payment or non-payment? This is something that can be hard to foresee or manage, even with the tightest of credit controls. With margins being squeezed and cost of labour increasing, even the most reliable of customers can find themselves having trouble settling invoices.
Anyone who sells to businesses on credit terms, can benefit from credit insurance. If the worst happens, and your customer cannot pay, you can claim 90% of the debt (or the limit).
Bally Mali, Sales Director at Towergate Credit and Financial Risks, says ‘2023 will be a challenging year for many HAE EHA member businesses with costs increasing in all directions and a shortage of labour. The good news is we can help by spotting insolvency signs early and providing up to date online information and intelligence of your customers. Our focus is on keeping businesses trading and stemming the domino effect bad debt can cause.”
There are some key questions that businesses should regularly ask themselves:
- If your business has credit insurance in place, when was it last reviewed?
- If your business is not currently protected, what could be your level of exposure?
- Do you regularly find yourselves unable to collect payments on time?