Home » Credit Management » European Risk Climate: Managing Trade Credit Mitigates Risk Exposure for Businesses in an Uncertain Economy

European Risk Climate: Managing Trade Credit Mitigates Risk Exposure for Businesses in an Uncertain Economy

In Europe more than a quarter of business failures are as a result of customer defaults and rates relating to bad debts have risen from on average .6% to 1%, depending on the industry and location. Only last month research from the insolvency trade body R3 showed that in the UK there are now 160,000 businesses that are only paying the interest on their debt, but not the debt itself. This has given rise to what are being termed ‘zombie’ companies, and includes organisations that are so over-exposed that they are never likely to pay their debts – technically insolvent.

Protecting customer receivables therefore is a B2B company’s greatest priority —and biggest risk.  It puts credit risk management at the top of the strategic agenda for CFOs and CEOs of small and large businesses, whether or not these businesses carry credit insurance.

Michael Feldwick, Head of UK and Ireland at Tinubu Square, developer of credit risk intelligence solutions, discusses key issues and potential solutions to navigating a safe course by identifying and analysing risk wherever and whenever it’s possible to do so. Managers should be seeking proactive credit risk management, that provides detailed intelligence on the financial health and credit worthiness of all customers or clients —and appropriate tools for assessing their individual and collective impact on the balance sheet.

To read the full story click on this link

Tinubu Square is a Member of BIIA

Leave a Reply