Late Payment, use it to your advantage

Written by admin on April 5th, 2011

As the effects of the recession continue, the high number  of business bankruptcies across the world does not seem to slow down. This can be put down to the reasons putting companies into bankruptcy. These factors are tight credit and low sales which can hang around even when the economy shows signs of recovery.  Thousands of companies have closed over the past 24 months depending on when you want to put the pin on the map for when business started its downturn. The rate of closure is still expected to stay high when the recession ends.

Companies which show a positive attitude to debt recovery face the crisis much better than others. The risk of losing money is making companies less sympathetic to debtors and their ideas to carry on trading. Money can be recovered faster by closing a business and selling off the assets. Business debt collection is a growing business and is a useful tool along with a company credit check.  It is no secret that getting an invoice paid is harder than ever, this isn’t necessarily because they are trying to save money by extending terms but also by going out of business altogether. An early warning system such as DUE2PAY helps companies to join forces to identify the late payers. Some companies are playing the system well and are using the current climate to improve an already healthy balance sheet by delaying payment and keeping money in their own bacnk account for longer. Whilst these are few and far between it should be recognised that this is and can be happening.

Getting paid is getting harder. Not because more customers are trying to conserve cash by extending payment terms, but because they are going out of business altogether.

Recent statistics show in the Brimingham area that almost  three-quarters are suffering with bad debt in recent months and that over  50% are having problems getting credit . The findings underline the problems facing company directors as businesses continue to bear the brunt of the recession.  The profits and reserves of businesses built up over the years are being eroded with such strong businesses being brought to their knees.  Insuring against invoice debt is getting harder,  credit insurers themselves are being caught in the cross fire and are being criticised for removing credit insurance cover.

Companies are turning to DUE2PAY in order to be aware of companies which are paying late. It has created a community of companies wanting to be on top of their credit. To identify other companies which they are trading with to join forces and avoid going under themselves.

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