Companies are facing an increasing risk of non-payment and the way they address this issue will determine their competitiveness.
The risk of non-payment will continue to increase because:
- As banks are scaling down their credit facilities, Companies request more commercial credit from their suppliers. Suppliers without commercial credit process and without access to the tools that help them to assess the risk of non-payment lose clients and generate risks.
- Higher pressure on margins which makes any payment incident to affect significantly the supplier.
- More and more companies are failing to respect their payment terms, adding more working capital cost to suppliers that usually do not charge interest for late payment.
- Credit insurance companies became more careful with the limits they provide for the companies and their criteria became a lot tougher.