Many bankruptcies in May and June
In the months of May or June, many employees receive their holiday pay. This creates additional demands on the cash of many companies. If this negative cash flow is not sufficiently factored in, the payment of holiday pay to employees - and in the following month the payment of payroll taxes - can lead to significant liquidity problems. It can even be fatal for the company! Traditionally, therefore, we see a peak in insolvencies in the months of May and June, as the invoices still to be paid then can no longer be met.
For companies that "survive", the problems are often not over. After all, June is followed by the holiday period. A period in which turnover decreases for a certain time or even, due to summer closure or the construction holiday, disappears altogether. But fixed costs continue to run as normal during this period. Traditionally, this results in liquidity pressure in September and October.
What if your buyer is temporarily unable to pay?
The advice is to make clear agreements and confirm them in writing. Keep in mind - if you have credit insurance - the deadline for initiating collection proceedings. If you expect that your debtor will not pay within the set deadlines, it is wise to apply for a postponement of the collection with your credit insurer in advance. If you fail to do so, your credit insurer may reject a potential claim.
More tips:
- Will the arrears period not exceeded, then you can accept this without consulting your credit insurer. Please note that the originally agreed due date will still apply!
- Will the arrears period well exceeded, then you should submit this request to your credit insurer. The credit insurer will then see if it will allow you to pass on insured.
- If you have customers in Germany, be extra alert to their payment behaviour. Should they go bankrupt, you run the risk that the German receiver will reclaim the amounts paid to you as supplier. This can go back up to four years! For detailed information on this subject, see the article 'Help German trustee reclaims turnover paid' From Xolv.
Should you receive a request to defer payment beyond the overdue period, contact us. We will check your buyer's creditworthiness and verify whether multiple payment arrangements are in place. In consultation with your credit insurer, a postponement of payment may be accepted, thus keeping your claim insured.
Want to know more about what you can do if your buyer is temporarily unable to pay, or have you received a specific request to defer payment beyond the overdue period? If so, please contact us at info@xolv.nl or 073 - 820 02 95. Our specialists will be happy to assist you.
