4 Tips For Your Company To Deal With The Increase In Defaults In 2023

The last three years have not been easy for anyone with a business in Pak. First, because of all the problems caused by the Covid-19 pandemic. Then, for the uncertainties caused on the planet by the war in Ukraine. And finally, because of an electoral process that divided the country. All of this has generated instabilities that are still being harvested — and one of them, according to experts, is the forecast for an increase in defaults in 2023.

According to the Consumer Indebtedness and Default Survey (PEIC), carried out by the National Confederation of Trade in Goods, Services and Tourism (CNC), the share of families with debts ( in arrears or not) stood at 78.9% in November 2022, higher than the 75.6% of November of the previous year. The study also showed that 30.3% of families were in default — the highest level in the series, which started in 2010.

In an interview with BBC , Dow economist Ali explained that the economic moment is difficult, with high interest rates, high inflation and instability in the exchange rate. And he even made a warning, confirming what the research says: “I see little room for reducing defaults, at least until the end of the first half of 2023”.

That’s why companies need to prepare and, if they haven’t already done so, prepare a plan to face the forecasts of increased defaults in 2023. It may seem like it, but it’s never too late to get organized and face the possible mishaps that lie ahead !

How to protect your business from rising defaults in 2023

All good business planning should already foresee the issue of default, as it is a risk to which any business is subject. However, if this factor is far beyond the initial forecast, it is time to review plans and focus on current economic figures. The situation in 2023 did not start well and, apparently, it will take some time to improve ― it is from the second half onwards that the light at the end of the tunnel should start to get stronger.

So your company doesn’t lose its way by then, we’ve separated 4 practical and strategic tips on how to protect your business against the risks of increased defaults in 2023. Check it out:

1 – Take out credit insurance

It may seem like an extreme measure for many companies, but having credit insurance is one of the options available on the market to guarantee the sustainability of your business and which has been gaining more and more supporters in recent years. In summary, we can say that this type of policy ensures the receipt of your sales in installments in the event of default or delay in installments by customers.

2 – Bet on credit analysis

In this tip, the ideal is to combine strategy and technology: develop a credit policy and have tools to automate the analysis process. Regarding the policy, keep credit standards aligned with your business profile, assessing how they impact cash flow and which flexibility parameters should be implemented in the analysis.

As for the tool, choose the one that best meets your day-to-day needs, giving the fastest and most assertive answers. The important thing is that the final result points to information that shows the suitability and ability of customers to honor the commitments assumed.

3 – Invest in credit recovery services

Investing in a professional credit recovery service for your company is undoubtedly a fundamental strategy to reduce the risk of default in 2023 and add more protection and control to your management. There are several models and formats to be implemented in practice, from friendly to judicial collections, each one using specific resources according to the complexity of the cases.

4 – Outsource the credit recovery service

Taking advantage of the subject of the previous topic, professionalizing the credit recovery service is simpler than you might think, especially due to outsourcing with specialized companies. In practice, these companies offer complete solutions, such as qualified and specialized labor, technical and strategic resources to deal with each situation, in addition to specific technology and systems, monitoring, monitoring of results and legal support.

Count on Global to face 2023 head on

To close this article, we cannot fail to indicate the best partner for your business to face the possible mishaps that may arise related to default in 2023: Global Strategies Financeiras. That’s because, with our ecosystem of solutions, you now have the support you need to anticipate problems or solve them later. Check out:

  • Credit and risk analysis: we have the best tools to offer complete reports on consumer behavior, targeting both national and international risk;
  • Friendly negotiation: we prepare our agents to dialogue with their customers according to the desired profile, always investing in credit recovery;
  • National and international legal collection: we offer legal support for our contractors in collection cases, with lawyers prepared to guarantee the best result, in addition to a system prepared to deal with collections in other countries.

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