Bad Debt Advice as Watchdog Targets UK Industries
Atradius, a leading credit insurer and credit management company, is advising suppliers to check their bad debt provision when doing business with any of the British industry sectors that are coming under closer scrutiny from the UK's accounting watchdog.
The Financial Reporting Council (FRC) has named five key industries it will be keeping an eye on over the next two years - automobile, pharmaceutical, retail, transport and utilities. The body will be more proactive in reviewing the accounts and financial reporting procedures of companies in these sectors.
The move follows the strengthening of the FRC's role in enforcing accounting and reporting standards in the UK - an attempt to prevent a scandal happening in this country similar to WorldCom and Enron in the US or Parmalat in Europe.
In particular, the organisation will be focusing on businesses and sectors that are vulnerable to accounting errors or changes in accounting regulations, as well as those experiencing difficult trading conditions.
Tony Garner, Business Development Manager at Atradius, says: "The FRC has identified these five industries, so it obviously thinks there is a greater risk here than in other sectors. Although it has not identified any specific concerns, it would be sensible for suppliers trading with these industries to beef up measures to protect themselves from the risk of debt, such as taking out credit insurance and credit checking new customers."
In addition to the five industry sectors, the FRC will also become more proactive in monitoring standards amongst businesses undergoing changes as a result of IFRS, FTSE 350 companies, smaller corporates and large private companies
Atradius offers a range of credit management services, ranging from credit insurance, which protects companies against the risk of bad debts if their customers cannot or do not pay their bills, to credit checking and debt collection services.