Eurozone Crisis - how to prevent making debt a company wide concern

by Paul Sparkes 3. November 2011 11:41

The government is preparing to give more money to the International Monetary Fund to help struggling nations, including eurozone states. Such a move could mean debt-ridden nations like Greece, Italy or Spain are indirectly helped by British taxpayers. 

Meanwhile, Prime Minister David Cameron is to meet G20 leaders in France to discuss the deepening debt crisis in the eurozone. He has ruled out direct contributions to the eurozone bail-out fund.

The UK currently provides £29bn ($46bn) of the IMF's £600bn ($950bn) lending capacity.

About £4.9bn of UK money is held in the IMF's fund but it could draw down up to £29.4bn from the Treasury in certain circumstances.

(Source: BBC News

There’s a lot to be learned from the Eurozone crisis. Poor cash management impacts your own working capital, eating into the amount of money you have to invest in the business and affecting your ability to pay your own debts. 

Furthermore, the longer a debt is outstanding, the greater the risk of the customer going out of business and the greater the cost of resolution. I thoroughly recommend you reading one of our latest white papers. In the first section we provide a checklist of cash control practices that will help you to create an effective regime for improving cash control. 

We then go on to explore the contribution that non-finance employees can make to prevent bad debt accumulating in the first place, by making bad debt a company-wide concern. In particular, the purpose of the white paper is to highlight the importance of not only getting the customer’s money in the bank but also ensuring it stays there.

As Labour leader Ed Miliband said: "As we saw in 2008, a global economic crisis can only be addressed by global economic leadership. Now is the time to turn the corner. To set out a plan that addresses the reality of faltering growth and rising unemployment - a plan that faces up to the G20 leaders' first responsibility: the responsibility to lead."

Click here to download our top tips to prevent making debt a company wide concern.

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