Supply-chain disruption is also a credit-risk issue: five steps to protect cash flow

However, disruption can also become a significant creditrisk.

When businesses face rising material, freight, fuel and staffing costs, pressure passes through the supply chain. Margins tighten,working capital is stretched and some organisations take longer to pay their suppliers. Even businesses that remain profitable can experience short-term cash-flow difficulties when costs rise unexpectedly or customers delay payment.

For credit-management teams, supply-chain risk should therefore be considered alongside conventional measures of financial health.

Businesses are increasingly concerned about disruption

The Office for National Statistics’ Business Insights and Conditions Survey, published on 3 September 2026, found that among businesses with ten or more employees:

• 28% were concerned about international conflict affecting their supply chains over the following year - 17 percentage points higher than in September 2025.
• 21% were concerned about shipping disruption - 12 percentage points higher than a year earlier.
• Among businesses concerned about supply-chain factors, 53% expected the cost of sourcing materials to increase.
• 46% expected transportation costs to rise.
• 63% of businesses expressed some degree of concern about increasing fuel prices.

The figures are official statistics in development and represent businesses’ expectations rather than evidence that bad debt is already increasing. Nevertheless, they show that supply-chain pressures are becoming a more prominent concern.

For businesses operating in transport and logistics, manufacturing, wholesale, retail or international trade, this creates an important question: do existing credit-control processes reflect how quickly a customer’s financial position can now change?

Credit risk is not static

A credit check carried out at the beginning of a commercial relationship remains important, but it only provides a picture of the business at a particular point in time.

A previously reliable customer may encounter difficulties because a key shipment is delayed, input costs rise sharply, an important contract is lost or one of its own major customers fails to pay. None of these developments necessarily means that the business will fail, but they can affect its ability to meet agreed payment terms.

Warning signs may first appear in changing paymentbehaviour:

• Invoices are paid progressively later.
• Previously undisputed invoices are suddenly queried.
• Requests are made to extend payment terms.
• Promised payment dates are repeatedly missed.
• Orders continue to increase while overdue balances remain unpaid.
• Communication with the accounts team becomes less consistent.

Recognising these changes early gives suppliers more options. Waiting until several invoices are substantially overdue can make recovery more difficult and increase the value at risk.

Five steps businesses can take to protect cash flow

1. Review customers throughout the relationship

Credit assessment should not end when an account is opened.

Businesses should regularly review the financial health and payment behaviour of important customers, particularly those with large credit limits or where a significant proportion of outstanding debt is concentrated among a small number of accounts.

Changes to company information, credit ratings, tradingstatus or payment patterns may indicate that an account requires closerattention. Ongoing monitoring can help credit teams identify emerging risksbefore they develop into serious arrears.

Services such as identeco provide access to commercial credit information and monitoring tools, helping businesses make informed credit decisions and respond promptly when a customer’s risk profile changes.

2. Look beyond the individual customer

A customer’s ability to pay may be influenced by wider events affecting its industry or supply chain.

Credit teams should consider whether customers are particularly exposed to fuel prices, international shipping routes, imported materials, geopolitical disruption or a small number of critical suppliers.This wider context can help explain changing behaviour and support more informed credit decisions.

It may also be appropriate to review sector concentrations. If a large proportion of the sales ledger is exposed to the same disruption,the overall risk may be greater than the assessment of individual accounts suggests.

3. Act quickly when payment behaviour changes

A late payment should not automatically be treated as evidence of serious financial difficulty. It should, however, prompt timely contact.

Early communication can establish whether the delay is administrative, relates to a genuine dispute or reflects a wider cash-flow problem. It also gives both parties an opportunity to resolve the issue before further invoices fall due.

Where appropriate, businesses can reconsider credit limits,payment terms or future supply while seeking payment of the outstandingbalance.

4. Resolve genuine disputes promptly

Invoice disputes can significantly delay payment, particularly when responsibility for resolving them is unclear.

Credit-control teams should have access to the documentation needed to respond quickly, including purchase orders, contracts, proof of delivery and the relevant correspondence. Sales, customer-service and operational teams must also understand their role in resolving queries.

A clear internal process prevents genuine disputes frombeing overlooked - and makes it more difficult for vague or unsupported queriesto delay payment indefinitely.

5. Escalate overdue accounts before the positiondeteriorates

Businesses are sometimes reluctant to refer an account for recovery because they want to preserve the commercial relationship. That is understandable, but allowing arrears to accumulate rarely protects either party.

Professional debt recovery does not have to begin with legal action. Early-stage intervention can focus on establishing contact, understanding the reason for non-payment and securing payment or an appropriate solution.

The age of a debt can materially affect the likelihood of recovery. Earlier referral means information is more likely to remain current, the circumstances are easier to establish and there may be more realistic options available.

A connected approach to credit risk

Effective credit management combines good information with timely action.

Credit information and ongoing monitoring can help businesses decide who to trade with, how much credit to extend and when an account’s risk profile may be changing. Consistent internal credit control can then identify missed payments and resolve straightforward problems. Where payment remains outstanding, specialist recovery support can prevent the account from becoming increasingly difficult to collect.

Together, identeco and Controlaccount can support this process.

identeco helps businesses assess and monitor commercial credit risk, giving credit teams greater visibility when making decisions about customers and suppliers. Controlaccount provides professional debt-recovery and credit-management services, helping businesses address overdue accounts before their value and recoverability deteriorate.

Supply-chain disruption cannot always be predicted or avoided. Its effect on cash flow, however, can be managed. Businesses that monitor risk, recognise changes in payment behaviour and act early will be better placed to protect their working capital—even when conditions across the wider supply chain remain uncertain.

Contact us to discuss how identeco and Controlaccount can help strengthen your credit-management and debt-recovery processes.

Source: Office for National Statistics, Business Insights and Conditions Survey, 3 September 2026. The survey findings are official statistics in development and should be interpreted with appropriate caution.

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