2021 is shaping up to be a risky year for companies that rely on trade credit to sell their goods and services. With an upcoming normalisation in insolvencies post-phasing out of state assistance mechanisms, all businesses will be tempted to shorten repayment terms, reduce credit lines and be more selective about who they offer credit to. The danger, however, is that undue caution will reduce companies’ ability to compete in a difficult market. How then should businesses protect themselves so they can maximise their trade credit offering without exposing themselves to unacceptable risk?
In the first two articles of our Domino Effect series, we discussed the reasons behind the Covid-19 insolvency domino effect and how to within your supply chain. Now we offer eight steps that companies can take to protect their business from the domino effect and improve supply chain management.