By Max Clarke
Businesses must manage customer debt better as the number of personal insolvencies reaches a record high, comments Carole Hughes, managing director at credit management and debt collection agency Daniels Silverman.
“Latest Insolvency Service figures show 135,089 people were declared insolvent during 2010, up by 0.7% compared with the previous year. The figures do not reveal the impact this has on businesses as these people’s debts are written off. This is further bad news for businesses as the latest analysis from Experian revealed a significant increase in late payment among UK businesses towards the end of 2010 with firms paying their bills more than 25 days late on average.
“In this tough environment, people’s financial situations can change rapidly so it is important that businesses regularly review credit limits and watch out for signs that their customers could be in financial difficulty. It is crucial that credit control processes are in place so problems are quickly identified and acted upon. Businesses should consider seeking advice from a credit management company as to how in-house credit procedures can be enhanced and refined to stop potential debt problems occurring and consider outsourcing non paying accounts to a reputable debt collection agency who will be able to collect money owed much faster and can help their customers to agree manageable payment plans and avoid insolvency.”;
Although personal insolvency has hit a record high, corporate insolvencies have seen a steady decrease, reaching a 29% reduction from Q4 2009 and a reductuion of 17% from Q3-Q4 2010. Some experts predict this figure to increase again for 2011.