Economic & Trade Risk Insights
 

The second edition of our flagship country risk report provides an overview of the risks to businesses from the domestic and international environment in 2025.    

In the ideal world, all transactions would be settled promptly and in full. The reality of business, however, is that occasionally, queries or disagreements will arise. If a customer disagrees with an invoice and refuses to settle it, then it becomes a disputed invoice. How your business deals with disputed invoices can be critical.   Find out what you can do to minimize the chances of an invoice being disputed and what to do when that scenario does arise.

When you extend credit to a customer, you allow them to obtain goods or services before they pay for them. You are trusting your customer to pay at a later date.   This can be a win-win situation. Extending credit can attract new customers and can create loyalty and trust among existing ones. Both new customers and loyal customers means more sales.   However, before rushing headlong into extending credit, it is important to acknowledge the potential risk involved. The European Commission has reported that one in four bankruptcies are due to invoices not being paid on time.

Creditworthiness is the likelihood that an individual or company will repay credit. This is a key business concept. Extending any form of credit comes with some risk of non-payment. Good financial management can help mitigate this risk.

Invoice factoring involves selling unpaid invoices to a third party in exchange for a cash advance.   It can be a useful way for businesses to access capital quickly to bridge cash flow shortages or cover unexpected expenses. In the right circumstances, it can be a good option for companies facing occasional and unanticipated cash flow issues or wanting to take advantage of unexpected business opportunities.

When a transaction is not settled in full at the point of sale, credit may be extended to the customer. The payment schedule, agreed to by both parties to the transaction, defines the terms of contract around when and how that credit will be repaid.   A payment schedule sets the dates upon which partial or full payments are to be made, so that both the buyer and seller can have a clear understanding of the repayment process.   Payment schedules can be structured in different ways, depending on the nature of the transaction and the parties involved.