The recession has caused problems across industry over the past eighteen months. Not only have businesses been faced with the prospect of their own insolvency but they have also had to prepare for the prospects of their customers becoming insolvent and the subsequent knock-on effect on their finances.
Concept Information Technology, a recruiter for IT services, has spoken out about the steps they have taken to protect themselves against bad debt. They have admitted to using a debtor protection policy courtesy of Lloyds TSB Commercial Finance.
Concept have admitted that they are glad they took such a step as they have actually had to use the policy protection over the past couple of years. Back in 2008 one of their customers became insolvent. However, due to their protection policy they actually received payment within 30 days of the customer filing for administration.
Speaking to The Recruiter, managing director of Concept IT Chris Short, said: “Taking out a debtor protection policy has provided us with long-term peace of mind and has ensured that we’ve been safeguarded against bad debts. Knowing that our working capital is protected has enabled us to continue our growth strategy and expand our client base further without fear of future failures – something that has helped us to achieve record turnover despite the tough economic climate.”
Speaking for Lloyds TSB Commercial Finance, client manager Alex Fiddian, commented: “It takes only one bad debt to significantly impact a business’ cash flow. We are seeing more and more of our customers use debtor protection policies as a safety net to protect themselves from defaults.”