Until such times that they are directly faced with a problem it is the nature of most companies to assume that all is well with their systems and operating procedures.
These are the companies that are most likely to be blindsided.
Constant monitoring of counter party risk is the order of the day combined with disciplined inventory control.
A customer’s previous reliability can provide a false sense of comfort. Past performance is unfortunately not a failsafe guarantee for the future. Be alive to tell-tale signs such as unusual ordering patterns, delays in payments etc.
In truth very few businesses fail overnight and there are usually enough warning signals which should enable a vigilant supplier to reduce its risk.
Current market conditions will continue to test but undoubtedly there will also be opportunities for those placed to take advantage of less efficiently organised companies.
By far the biggest danger to the financial wellbeing of any organisation is complacency.
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