Press Release
BUSINESS FAILURES ON THE INCREASE ACROSS THE BOARD
Equifax offers SMEs valuable advice on protecting their business
London, 13th January 2006 – According to the latest figures from leading business information specialist, Equifax, business failures rose across a number of major sectors in 2005, causing concern for many companies as they go into the New Year. The Retail sector suffered the greatest increase in failures, rising 25% compared to 2004. The Hotel & Catering and Construction sectors came joint second, with both recording increases in failures of 19% year on year. The Transport & Communications sector reported an increase in failures of 11% year on year and the Manufacturing sector saw failures rise by 7%.
This wholesale increase in business failures across all major sectors of the UK business marketplace shows that insolvency is a very real threat for businesses, with small firms being the most vulnerable to losses. Equifax is therefore advising that good risk management becomes an essential part of business operation.
Neil Munroe, External Affairs Director, Equifax Ltd, comments, “With insolvency figures increasing year on year in all major sectors, it is vital that any organisation guards against the risk of bad debt and fraud. SMEs can protect themselves by putting simple checking processes in place. And the array of online tools now available in the marketplace means they already have access to fast and efficient protection that is convenient and cost-effective. However, ongoing monitoring is just as important to allow businesses to make informed decisions at all times, which is why Equifax has invested in a series of products designed to give SMEs even more protection.”
Powerful new online tools mean businesses can check a customer’s current credit worthiness instantly, before a commercial relationship is started. And email and SMS alerts offer updates on changes to an account such as CCJs, new directors or a credit limit change, enabling SMEs to keep an eye on the financial performance of key customers and suppliers.
Equifax has also been at the forefront of creating credit communities which enable businesses to share critical default information about their customers as soon as it happens, including bounced cheques, CCJs and letters before action. By sharing critical and timely information, businesses are in a better position to react quickly and effectively to changes in their customer’s financial status.
Munroe confirmed:. “We believe it is vital that businesses share information on bad debtors and not to be afraid to voice concerns about payment or to refuse credit to those who pose a risk to a business. In this way, they can more easily and effectively manage bad debt and protect themselves against fraud ”
Top Tips for Protecting a Business from Bad Debt and Fraud
- Don’t start a new commercial arrangement – with a customer or supplier – without doing a basic credit and fraud check on their business
- Even if a customer is giving you business, don’t forget to monitor their credit status on an on-going basis
- Ensure that customers keep to payment terms – charge interest for late payments
- Set up an alert system for any major changes in the commercial status of major customers and suppliers – so that you’re not caught out if their financial circumstances change
- Join a credit community to share information on key customers and suppliers – from late payments, to bounced cheques
“The latest insolvency figures don’t paint a pretty picture and small businesses stand to lose a lot if they don’t heed this warning,” concludes Munroe. “However, there are number of powerful tools and services available, including a comprehensive range from Equifax to help SMEs protect themselves from the threat of bad debt and fraud..”
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Notes to Editors
For further press information please contact: Claire Foster, Wendy Harrison or Kate Clements at HSL on 020 8977 9132 / Fax: 020 8977 5200 or Email: claire@harrisonsadler.com
Equifax Ltd is part of Equifax Inc. (NYSE: EFX), a global leader in turning information into intelligence. For businesses, Equifax provides faster and easier ways to find, approve and market to the right customers. For consumers, Equifax offers easier, instantaneous ways to buy products or services, and better insight into and management of their personal credit.
Equifax. Information That Empowers.
Equifax operates in 12 countries and had $1.3 billion in revenue during 2004.