Swindon-based law firm Thrings has warned companies about retail failures. Counting Debenhams PLC, the total number of retail businesses to have gone bust this year is already at 21, half of the total for 2018. While this has directly affected 31,000 employees, what about suppliers to those companies? The Debenhams crisis serves as a stark reminder to take steps to protect our businesses from the failure of others.
Suppliers are usually the last to know when their customer is going under, but there are some tell tale signs to look out for. The biggest is probably delayed payments. If you notice payments taking longer, with no convincing explanation given by your customer, they might be in trouble. Trust your gut and run a credit search on the company if you’re concerned.
If things aren’t looking good, you might want to refrain from offering up more credit (i.e. supplying more products that might go unpaid) as this would leave you even more vulnerable should the worst happen. Whether your customer likes it or not, it’s time to politely start pressuring them to pay what is owed and for you to restrict trading to ‘cash terms’ so that you’re paid on, or before, delivery. Why risk your business?
More details here.
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