The number of overdue payments experienced by UK businesses reached a two-year high in the final quarter of 2015, with increases reported in 14 out of 17 major industry sectors, according to Euler Hermes, the worldwide leader in trade credit insurance.
“Business continues to drive the growth and export agenda, but the increase in financial stress across much of UK plc illustrates that more needs to be done to stop the domino effect of late payments,” said Valerio Perinelli, CEO of Euler Hermes UK. “Our data suggests challenging times ahead, so firms should tread carefully when offering open credit terms on new contracts or to new customers.”
Firms reporting delayed debtor payments rose by 12% from October to December 2015 compared to the third quarter of 2015; the highest level for eight consecutive quarters. According to the findings, one in six (17%) companies reported having difficulty in making payments on time last year, up from 10% in 2014. The average number of seasonally adjusted overdue payment incidents reported per quarter fell by 11% year-on-year in 2014 vs 2013, before increasing by 8% in 2015.
If your business offers the sale of goods or services on credit terms then it is really important to ensure that you are covered should you experience insolvencies and bad debt, and can handle the domino effect should you experience either. Having the correct credit insurance in place helps manage risk and the added credit control aspect supports your business by helping to chase slow paying customers for both insured and uninsured debts and much more. Read more about our credit insurance services here.