As insolvencies continue to rise, Yorkshire businesses are being urged to keep even closer checks on the financial health of their key customers.
Charise Marsden, debt recovery manager at hlw Keeble Hawson – one of Yorkshire’s largest law firms, with offices in Sheffield, Leeds and Doncaster – advises following a check list which starts with examining trading and payment patterns.
She said: “If the level of orders suddenly increases, it could be that other suppliers are refusing to deliver so try to adjust your payment terms. Extended credit requests or taking longer to pay can indicate financial problems, so get to the bottom of these immediately.”
Ms Marsden also recommends companies to beware of unjustified customer complaints about goods or services, delaying tactics – and to look out for a large number of invoice queries, which could mean that the customer is buying time. She recommends gathering market intelligence and finding out if there are any warning signs such as redundancies and/or management departures.
Ms Marsden added: “When monitoring customers it is also important to track any changes that may affect their financial position and ability to pay. Media platforms, such as Google Alerts or information providers like Equifax and Experian can help with this – while Companies House provides free information on County Court Judgments (CCJs) and formal insolvency.”
Businesses are also advised to seek specialist advice if a payment problem occurs, rather than wait until customers stop answering emails or phone calls.
“It is best to commission an experienced law firm at an early stage, because if your customer is not paying you it is very likely they are not paying others too – and you need to act quickly to maximise your chances of recovery.”