With post-pandemic B2B trade increasing, sanctions on collecting debt removed, and suppliers being less tolerant of late-paying debtors, what impact is this having on creditors placing debt with STA International?
Q1 2022 saw placement increase by 40% over the quarterly average since April 2020, with 60% of debt values coming from suppliers in the Aviation, Metal Industries, Education, Auctioneers, Builders Merchants, Recruitment, Transport, Software, Food & Drink and Health sectors. Measuring Q1 2022 against the pre-pandemic volumes of 2019, we found a 6% increase in debt volumes placed.
Enforcing the Late Payment of Commercial Debts Act meant that recovery of interest and costs from debtors covered three in every four pounds charged to clients for commission, a 75% saving.
The other significant difference in Q1 2022 was the demand for pre-collections services to support in-house credit control departments. The increased demand came from acquisitive companies seeking to advance cash from newly acquired ledgers and companies seeking pre-audit cleansing to minimise bad debt write-off.
In summary, creditors now demand faster payment of invoices and are willing to escalate to legal action should amicable efforts fail.