Big high street brands such as Toys R Us and House of Fraser have suffered high profile insolvencies this year and others like Debenhams and Marks & Spencer have been forced into an aggressive program of store closures.
In fact The Centre for Retail Research confirms that 41 high street names have entered insolvency so far in 2018… and it won’t end there.
Now we realise that not everybody deals directly with these big high street brands but the likelihood is the chain of supply will work it’s way to your clients and suppliers in some way and will they be forced to pass on their pain to some degree ?
The question is, what can you do to avoid being a victim in these trying times.
The answer is simple, keep doing your diligence.
Regular readers will know that we often speak about employing good checking processes and systems into your credit control procedures. In these trying times, let’s quickly revisit them.
1. Conduct REGULAR credit checks on your client and suppliers.
- Check for any adverse profit warnings, reduced credit scores and credit limits. All of these are indicators that the reference agencies and regulators are concerned.
2. Reference Companies House and other business databases.
- Check your existing and new information with the databases. Have new businesses been set up by the same directors ? Does this point to an imminent change in the business ?
3. Do your diligence on the internet.
- The internet is a great source of news and notices. If there are rumblings of troubles and insolvencies on the horizon, it’s better to be forewarned so you can act first, not last.
Now we’re not saying that by you conducting the correct diligence, the rate of company insolvencies will fall, far from it.
What we are saying is that in these days of companies closing, entering insolvency and then ‘pheonix-ing’ from the flames overnight into another business, you are better forewarned.
For 2018 has definitely shown us that your leopard can indeed change it’s spots.
If you would like to learn more about the diligence, credit control processes and methods to improve overall cash flow in your business check out our other News Blogs or attend our Seminar, that is taking place as part of Leeds Biz Week.