Latest research proves minimising business risk needs to be higher on the agenda
We’ve talked about minimising business risk a number of times in this news section, but it seems that businesses are still failing to adequately protect themselves from financial loss due to suppliers becoming insolvent.
This has been highlighted in recent research by insolvency trade body R3, whose study in the Midlands area illustrated that around seven per cent of firms in the region had been creditors in insolvency proceedings last year. That equates to 43,000 business affected – the majority of them small to medium-sized enterprises.
In a bid to grow the business it seems owners are taking on new customers without carrying out the necessary financial checks to minimise their exposure to risk.
The report claims that the UK has one of the best insolvency regimes in the world, but with many firms in this position unable to claim back all of the money owed to them, the effects can still be detrimental.
There are many solutions available now to help reduce risk, from general credit checks to more comprehensive services that can not only carry out the vital initial checks, but monitor customers and suppliers on an on-going basis for early identification of any potential issues. Forearmed is forewarned and far better to learn of an issue early on so that it can be avoided or rectified before it becomes a real problem for the business.
Our Business Protect credit checking solution was launched specifically for this purpose, and can help company owners make informed decisions about whether to do business with an organisation based on real-time information on their financial status, as well as credit history and payment history. These are all very relevant and important factors when choosing to do business with someone and should never be overlooked for fast financial gain.
Similarly, monitoring the financial status of a client can actually help identify potential reward factors. Learning that a client is in good financial shape and growing can be an indicator of potential growth of their requirement with you – so it is a great way to spot an opportunity to do more business with them.
There are some cost-effective options out there to gain one-off financial checks, but the best thing to do is to opt for continual monitoring so that the picture of how a customer is doing is always accurate and up-to-date. Things can change so quickly in business, so doing a check at the beginning of the relationship and then thinking things are safe for the foreseeable future really can be a regrettable approach. Far better to opt for a continual solution to what is a growing problem in today’s economic climate.
Business Protect is a fixed-fee solution and offers monitoring of up to ten clients, with unlimited reports available. For further information, get in touch on 01827 54944.