After insolvency figures have fallen in recent months despite the Corona crisis, experts are arguing about the question: Is the great wave of bankruptcies coming or not? Companies that have potential zombie companies in their portfolio can take precautions with a so-called zombie card.
At the end of last year, Deutsche Industriebank (IKB) warned that the risk of insolvency for companies in the manufacturing sector as a result of a renewed downturn (…) was much higher than the expected figures alone (…) would suggest. The sector has been on a downward path for several years, and the risk of insolvency has increased disproportionately. Rising transport costs and raw material prices are placing an additional burden on the industry. Under these difficult conditions, it is important for companies to keep an eye on their own credit management.
Andreas Del Re, professor of accounting and board member of the German Credit Management Association, confirms in an interview with Collenda: “Credit management is especially important in industries whose clientele operates in the crisis-ridden sector.” He cites suppliers of aircraft parts who work with airlines as an example. Regine Hilgers, product owner at Collenda, also advises vigilance: “It’s no longer enough to wait for the quarterly figures; credit managers need to monitor their customer and supplier relationships on a daily basis, especially in these difficult times.” Customer requests for permanently longer payment terms, possible deferrals or requests for installment payment plans, for example, are typical warning signals that something is amiss, she says. Applications such as the Credit Management module of Collenda’s Open Credit 4.0 software suite help to keep an eye on the customer portfolio and enable early hedging of risks through proactive action. The advantages of Open Credit 4.0:
- Numerous interfaces to external information service providers and credit insurers reduce the manual effort required
- User-friendly workflows and intelligent automated processes save time and money
- Operation in the cloud ensures scalability and flexibility
A so-called “Zombicard” can provide support. It monitors key figures that can be used to identify struggling companies in the portfolio (zombie companies are those that are only kept alive by government aid and are at high risk of insolvency). In particular, the most important customers should be kept in view here.