By Max Clarke
Carole Hughes, managing director of leading credit management and collections agency Daniels Silverman, speaking on recent predictions of a 10% rise in company insolvencies in 2011, says:
“A recent Begbies Traynor report suggests that more than 23,000 firms are likely to face insolvency during 2011. The report indicates an increase of 20% of firms experiencing significant or critical financial problems since Q3 2010. Particularly vulnerable are the IT, business services and construction sectors.
“We’re all aware that this year is looking particularly tough for SMEs. To ensure that you are not on the receiving end of a company which is unable to honour its debts, act beforehand to ensure that your T&Cs are watertight before signing a new customer: Our ‘top tips’ include: Always perform credit checks to ensure you know your customer ; give your customer a credit limit and review this regularly; invoice promptly and double check details are accurate; phone your customers before payments are due to ensure there are no queries; send monthly statements and finally consider outsourcing late paying accounts to a reputable collections agency — you can write this in to your T&Cs before signing contracts.”