Business failures soar as insecure consumers withhold spending |
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Mon, 02 May 2005 09:20
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The alarming bankruptcy figures indicated by the leading credit validation and global information solutions Company, Experian is shuddering.
With the retail industry being affected the most, due to lack of confidence by the consumers and subsequently low and minimized spending, as revealed by the Managing Director of Experian's Business Information Division, the overall figures have considerably soared in the first quarter of 2005 to almost 1.9 percent as against, the fourth quarter rise in the year 2004.
The business failure rates have multiplied to 53 percent in the food retailing industry due to incredible fall in consumer spending.
| Major portions of all the industry sectors have been adversely affected in Britain (15 out of 34), due to an unexpected rise in insolvencies. The actual figures being 4168 UK companies being bankrupt in the first part of the year, compared to the last year’s figures being 4092 in Q4 2004.
These figures and the increasing troubles attached with it, definitely calls for a control check. Though such possibilities cannot be eradicated, it certainly can be avoided. The MD of Experian strongly feels that “businesses should be more stringent about credit checking to help protect against insolvency”.
Adopting best practices in the areas of credit management is one of the weapons that can be cultivated by businesses, which will caution them to such issues and will also go a long way in protecting their future. Besides, understanding the authenticity by implementing regular checks on new and existing customers can also reduce and eventually curb business failure and bad debt risks.
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