Should the worst happen and your company suddenly become exposed to a significant unforeseen bad debt, are you adequately prepared?

All businesses, irrespective of their size, are susceptible to risk in the supply chain. However, there are essential measures you should have a place to limit the impact on your own business should a customer insolvency event happen.

A useful activity is to review your company terms and conditions to confirm that they remain fit for purpose. You may have included a Retention of Title (‘ROT’) clause some time ago but is that clause still sufficiently robust and protective of company interest? Overall, you are seeking to ensure that you stand the greatest chance of getting your goods back. You may require some professional assistance in the review process but should you make changes, you must communicate these to your customer base.

You should also review your company policies regarding credit monitoring and seek to maintain an ongoing awareness of customer credit ratings and significant events (high staff turnover or shrinkage for instance) that may be happening in your customer organisations. Monitoring will include early identification of any changes in payment pattern, assessing company dependency on particular accounts and practising robust credit control to minimise any risk.

If something goes wrong, early intervention will always ensure the best outcome for your business. If you suspect that your business is threatened by a customer who may be facing financial difficulties, contact EWS for a free consultation to ascertain likely impact and assistance in the development of an appropriate strategy. Contact us.