Get cover for festive slump, bosses urged
An insurance chief has warned businesses to financially protect against a post-Christmas slump by taking out trade credit insurance.
Nigel Birney of Trade Credit Brokers said businesses are likely to see increased levels of insolvency and a slowdown in the average number of days it takes to settle invoices post-Christmas.
He said: "Not only can the months of January and February be slow in terms of sales and trading, it is also a crucial time to make sure that your invoices are paid, and paid on time, in order to avoid major cash flow difficulties.
"It can only take one business in a supply chain to suffer a bad debt to create unnecessary financial difficulty and this, coupled with rent payments falling due, staff being on holiday and other seasonal pressures, resulting in a potentially catastrophic situation which lands at your own door."
Mr Birney pointed to the collapse of wholesaler Palmer and Harvey, which has resulted in more than £100m of credit insurance claims, as a good example of how businesses have protected themselves.