July 24, 2024

The Catholic Transcript

Complete News World

64% of UK businesses expect the risk of insolvency to worsen

64% of UK businesses expect the risk of insolvency to worsen

Almost half of British companies expect their customers’ B2B payment behavior to deteriorate in the next 12 months against a backdrop of severe liquidity problems, according to the 2024 Payment Practices Barometer produced by Crédito y Caución.

64% of UK businesses expect to be at risk of bankruptcy. One of the reasons for this upward trend is the budget stimulus linked to the pandemic, which has increased business spending and borrowing.

The use of trade credit in B2B strategies plays a very important role in the UK. Almost two-thirds of sales are made on credit, highlighting its importance in maintaining competitive advantage. 53% of companies across all sectors use trade credit as a major source of funding to address treasury issues and the impact of credit risk on their customer portfolio. In this context, late payments affect 40% of credit sales and non-payments represent another 7%, mainly due to customer liquidity problems.

A risk management strategy is critical for the construction industry as residential demand declines. Half of companies across all sectors saw no significant change in their average collection period, although 13% saw their debt collection efficiency deteriorate, particularly in the construction sector.

The evolution of the national economy is a major concern of British companies, which limits access to finance and makes investment difficult. In an economy where the service sector plays a fundamental role, there is growing concern about rising costs fueling inflation. Geopolitical uncertainties are another cause for concern for UK businesses in the short term, as they could further disrupt costs and disrupt delivery times, adding to inflationary pressures. For a long time, the main challenge identified by companies in all sectors is the impact of strict environmental regulations and their effects on the operations of companies.

See also  Kevin Spacey accused of sexual harassment in UK | Reporter

Follow us: