Insolvency Outlook for 2019
We read with interest the statistics published by Euler Hermes in January on the Insolvency Outlook for 2019.
As an upward trend in insolvency is forecast globally for the third consecutive year (+6% y/y) and 1 out of 2 countries expected to register more insolvencies than before the financial crash, we fully support Euler’s view that “the insolvency outlook calls for more selectivity and preventive actions such as stellar credit management practices”.
Whilst businesses continue to focus on the uncertainty of Brexit, the outlook does not paint a positive picture for 2019 with a 9% increase year on year forecast in the number of insolvencies in the UK.
“These are worrying statistics” comments Janice Megram of Veritas Commercial Services. “Too often we see the direct impact that late payment has on the cash flow of a business. Now more than ever it is imperative that businesses focus on their credit management practices and seek help when required to ensure that they get paid on time.
Construction and retail insolvencies dominated 2018, however no industry is immune in the current environment.
We want to see businesses taking a firmer approach to credit control. Businesses are often unaware of their right to apply statutory interest and late payment charges on overdue debts or don’t have the resource available to implement the procedure.
The Prompt Payment Code is also there to support businesses and to combat the impact of (often larger organisations) taking extended terms with smaller suppliers. We would like to see more businesses sign up to the PPC as this benefits all in the supply chain”.
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