Whilst late payment times have dropped in the clothing and textile industry, they continue to pose a threat to smaller scale businesses. You may know firsthand what it’s like to chase payments, and to have your cash flow interrupted when a client goes insolvent or experiences protracted default.
But going through that isn’t inevitable. We know how time consuming and disruptive unpaid invoices can be. It’s a serious issue being felt across all sectors, and can be potentially fatal for your business. But the clothing and textile industry can be particularly fluctuant and therefore protecting your invoices is imperative to surviving any client bankruptcies or folds.
With UK consumers clearly feeling their purses pinched and spending less money on clothing and retail than in previous years, fashion companies need to focus on getting the money they’re owed for the work they’ve already done. Having invoice insurance cover helps to unlock funds trapped because of late payments, and also increases your chances of securing further borrowing. This can be crucial to help your business survive in a slow-growth economic climate, like the one we’re experiencing at the moment.
In 2015, debtor days for clothing and textile businesses averaged 54, and as mentioned, they have in fact fallen since then.
But many companies, particularly those of a smaller scale, have long waits before getting paid. Plus consumers are more hesitant to spend money on ‘delayable’ goods, like clothing, in the current fiscal atmosphere.
They need to save for essentials. This puts all levels of the clothing and textile industry at risk.
Fashion is a cash flow intensive sector. There are many periods of the year where money won’t be coming in, but you’ll still have a lot of outgoings. Managing your cash inflows and outflows effectively and carefully is integral to surviving, even if you have a high-potential business or one that’s already experienced rapid growth. But things change quickly. Just recently Marks and Spencer, Britain’s largest high street clothing shop, announced that they’re planning on closing 100 stores nationwide. That doesn’t sound good.
If a client goes bust, then you will inevitably feel the ramifications of that and sometimes also be threatened with bankruptcy, unable to pay your bills or staff. Fashion by nature is a fickle industry so something can be flying off the shelves one week and grinding to a halt the next. Don’t let factors beyond your control threaten your business. Insure your invoices against client insolvency and protracted default.
We keep up-to-date with any changes taking place within the clothing and textile market and this gives us real-time expertise and information about your clients.
Our team can then provide you with insights into who is safe to do business with, and who you should be more cautious about. This enables you to grow your business dynamically but safely, with peace of mind. Don’t carry on doing risky business – take out invoice insurance today.
We’d be delighted if you get an invoice insurance quote for by clicking the link below – it’s a simple process and won’t take long.
Giulia Macgarr