Every business no matter how big or small is susceptible to the risks in its supply chain.
With the fall in the oil price causing increased levels of business distress, start 2015 by doing all you can to limit the impact of supply chain insolvency on your business.
The good news is there are a number of things you can do to limit the impact if one of your suppliers becomes insolvent.
Make sure your business has awareness at all times of what your suppliers’ credit ratings and ensure your terms and conditions are robust enough to deal with a problem in the supply chain. If you haven’t reviewed them in a while, now may be a good time to do so.
You’d be surprised how many companies don’t have robust enough terms and conditions, so take the opportunity to review yours and ensure that they are fit for purpose. Have you got ‘retention of title’ clauses in them? If you do make any changes, make sure you communicate this with customers and suppliers.
Increase your awareness of policies around credit and invest in better infrastructure within your business to monitor suppliers. That way, you can ensure that if your supplier’s finance director leaves, for example, you are made aware of this, and can monitor how things progress at the business.
If something does go wrong, seek help early on to make sure you stand the best chance of getting your goods back. If managed well, it can make the best of a bad situation.
At Muckle LLP, we can help you take steps to safeguard your position before things take a turn for the worst.
We can help you to demonstrate a valid ‘retention of title’ clause which essentially means that we can take a variety of steps in order to get you the best possible outcome – be it enforcing title provisions for you to retrieve your deliveries to an insolvent customer, or securing payment for them, or renegotiating contractual commitments to ensure projects are delivered on time.
For more information, help or advice please contact Andrew Cawkwell on 0191 211 7957.