Recession sparks sharp increase in business monitoring
Published:  27 August, 2009

LONDON: Business information provider, Equifax, has seen the use of some of its business monitoring alerts increase threefold in the past year. Equifax believes this phenomenal rise demonstrates that businesses have switched on to the importance of staying up to date with the status of customers and suppliers, in order to protect cash flow and safeguard against bad debt.

Clearly reflecting the current pressures affecting businesses of all sizes, Equifax has also seen an almost 200% increase in alerts for Gazette and Detrimental information.   These are reports that indicate a court or other negative action against a business and are a good early warning sign of potential repayment problems for other creditors.

The other area where Equifax has seen a significant increase in reports taken is for credit information that provides a greater insight into the people behind non-limited businesses such as sole traders and partnerships.  This has increased by over 100% in the last 12 months and suggests that many organisations are recognising the value of understanding the financial circumstances of the people running a business.  This will be particularly relevant if it's a new start-up.

Neil Munroe, external affairs director for Equifax comments, "It's very encouraging to see businesses taking positive steps to stay on top of the financial status of customers and suppliers with our monitoring tools.  Rigorous credit checks are also crucial to help businesses protect cash flow and guard against bad debt.  They are essential when taking on new customers.

"In times when new credit is difficult to come by and banks are reducing or even recalling debts, there may be a temptation to cut spending on basic processes and disciplines. But when times are tough cutting back on checks could be a false economy."

Following Equifax's report of an almost 40% year on year increase in business failures in Quarter 2, it is crucial for companies to remember that not all business is good business. Even in a stable economy it may only take one or two important customers going bust to jeopardise a company's own financial standing. Yet it only takes a few simple credit checks and ongoing monitoring of key customers to help a business protect itself against bad risk and secure a good financial future during and after the recession.

Sign Up

For the Builders' Merchants News enewsletter.

In the spotlight


Builders Merchants Vacancies – UK Wide

At Arco, we are an industry specific recruitment consultancy, providing sales and managerial staff Nationwide to Merchants, Distributors and Manufacturers of Building Materials within the Construction Sales Sector. Priding ourselves on our unparalleled customer service and hard work, we offer a fresh, innovative and personal approach to recruitment specifically designed to meet our clients’ needs and candidates’ skills.

Guest Blog by Simon Damp

Is DIY a lost art?

As time goes by, the art of do-it-yourself when it comes to activities around the home and garden is fast becoming more and more of a lost art.