Due to current economic uncertainty for both households and businesses, there are growing fears that we could see a wave of company collapses in 2023. With increased costs, the rise of inflation and a depleted workforce, there is a pessimistic outlook for many businesses that is reflected in the highest rate of insolvencies since 2009.
In 2022 the total number of company insolvencies was 22,109 which is the highest since 2009 and 57% higher than 2021. In fact, 5995 company insolvencies were registered in Q4 2022 which was the highest total since Q4 2008, 30% than Q3 2021 and 7% higher than Q3 2022. All industries saw increased insolvencies in 2022 compared to 2021.
As we look to the future, is your business prepared for the tough times ahead? How would your business be affected if you lost your biggest buyer or perhaps your client loses a big contract and fails to pay a sizeable invoice, how much revenue would you lose? Now is the time to consider taking out trade credit insurance to safeguard your business.
Trade credit insurance would help protect your business should a debtor become insolvent or fail to pay a long outstanding debt. Plus it can also keep track of the credit strength of your customers and suppliers. As businesses put a brave face on their finances, customers and contracts may appear to be doing well but underneath all the smiles, they could be in debt. When you realise that your customer is struggling financially, it might be already too late and money is owed to you.
Trade credit insurance will reduce the risk to your business by monitoring the credit rating of your customers, recovering debts and paying invoices, should the debt be irrecoverable. If your business is dependent on just a few major customers or upon regular cashflow, trade credit insurance should be considered as part of your disaster recovery strategy and risk management review.
If you have any questions regarding trade credit insurance, please contact the Sutcliffe & Co Team on 01905 21681 or email Enquiries@sutcliffeinsurance.co.uk
