Claims for late payments in 2013 have almost doubled from the previous year, says Coface UK, the credit insurance firm. Their findings suggest ‘customer insolvency’ and protracted default are beginning to outweigh insolvency claims. In 2012, across 590 clients, just 33% of claims were protracted default, compared to 67% insolvency claims. This year, 60% of claims were due to late payments from customers and 40% were classed as customer insolvency.
These figures represent a decline in firms entering insolvency each year, however, in the current economic climate, many businesses are still fragile. Andrew Share, Director of Information, claims and connections at Coface UK, commented, ‘low interest rates and favourable credit conditions mean that businesses are able to survive, although many are just treading water unable to grow or invest.’
To protect against these credit issues, it is vital firms have credit management procedures in place to limit the risk of late-paying customers. If you need support in restructuring your company or would like more information on insolvency, please visit our page ‘Is your company insolvent?’ or call us on 0800 9700539.