24 August 2009
Buyers are taking the threat of suppliers going bust very seriously, figures from Equifax show.
The business information provider registered a 300 per cent increase in customers using its business monitoring alerts in the past year.
It said the "phenomenal rise" demonstrates companies are keeping a close watch on the financial position of both suppliers and clients, in a bid to safeguard themselves from risk.
In July, Equifax found a total of 8,874 firms ceased operations during the second quarter of this year (Web news, 20 July).
This represents almost a 40 per cent rise compared with the same period in 2008.
The company's external affairs director, Neil Munroe said: "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."