The due date comes…the due date goes and a new reality sets in: Will your customer pay? How will you know when a good customer suddenly begins to struggle? Most likely, you
won’t. But the threat is real.
Solving this challenge is key. Several high-profile bankruptcies are making the news, particularly in the retail industry as companies struggle to keep pace with the reality of customers that do not pay their invoices. Just this year, notable names like the Sports Authority, Eastern Mountain Sports and The Limited all made news with their official bankruptcy filings.
But even growing companies are not exempt from the risk; paradoxically, rapidly growing businesses are often more susceptible to bankruptcy. If their cash flow isn’t tightly managed, their expenses can accelerate faster than their accounts receivable (A/R) are paid.
Some analysts forecast a 1% increase in North American bankruptcies this year despite optimistic figures for economic growth overall. This moderately-increased bankruptcy forecast in the U.S. seems tame compared to that of other regions: Companies exporting to Latin America should brace for a 12% increase in insolvencies this year while companies in the Asia-Pacific region are expected to experience a 6% uptick.
Late payment and payment default situations like these occur with alarming frequency. That makes it critical for the financial health of your company to minimize them. So how can you mitigate this risk?
Download to learn how to avoid non-payment.