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Spring 2023 23 www.hae.org.uk www.eha.org.uk E conomic forecasters predicted that March would be the start of a difficult period, particularly for SMEs and, with that in mind, staying on top of payments should be a priority for those in the hire sector. Latest quarterly figures from the Insolvency Service have shown that the number of company insolvencies across all sectors in England & Wales increased by 30%, compared with the previous year. Credit Management Specialist and MD of Top Service Ltd, Emma Reilly, said construction sector output was still relatively strong at the start of 2023. However, she warned: “Many experts are forecasting that output will fall later in the year, particularly in house-building. The nature of the construction industry means that one insolvent main contractor can bring down dozens of smaller sub-contractors and suppliers so the sector is vulnerable in that respect.” There is no exact science when it comes to extending credit and the risks involved. Information is power and the more information businesses have access to the better, Emma said. Ultimately, when extending credit facilities there is one question being asked: “Will you get paid on time, late or not at all?” Industry specific credit information is the most relevant and up to date information available to businesses to reduce the risk of bad debt. Credit management experts at Top Service Ltd, the only supplier of construction-specific credit management solutions have put together some tips for tightening credit management: TIP 1: It might sound simple, but make sure your customer knows how to pay you. Include your bank details or whether or not they can pay by debit or credit card on every invoice, statement and chasing letter. TIP 2: For new customers make a courtesy call, did everything go well with the order, did they receive the invoice OK, are there any other jobs they’d like a quote for? Asking these questions will immediately eliminate the top 2 tactics for payment delays. TIP 3: Credit check and carry out due diligence checks. Nothing will beat the trading experiences supplied by your fellow traders. TIP 4: Utilise a service that will keep you up to date with credit information changes and most importantly - act on the alerts. If one of your customers picks up a new county court judgment & they owe you money - seriously consider whether you need to act quicker than you normally would. Emma said: “Businesses should stop thinking of credit management as just chasing money. Credit management should begin at the start of the business relationship, not just when your customer becomes a late payer. “The beginning of every business relationship is full of positivity. It’s then you should be collecting relevant information and ensuring your customer is set up to start a good business relationship. Collect information and gather your intelligence, do your due diligence and assess the risk. Outline your terms and make sure the customer has everything they need to get payments to you on time. “Credit management should be a positive process. Done right, credit management will help to create and maintain great business relationships” HAE members are being offered free credit control health checks by Top Service, along with a free trial of its service and a 25% discount off a standard membership to its construction- specific credit information and debt recovery services. Anyone interested can call 01527 503990 , email enquiries@top-service.co.uk or contact the HAE EHA Customer Services Team on 0121 380 4600 . Getting paid during periods of unrest can be make-or-break for SMEs so make sure you have a good credit management strategy. PROTECT YOUR BUSINESS CREDIT