The number of Dutch bankruptcies is rising by some 77 percent this year, according to the bankruptcy outlook of credit insurer Atradius. This increase , while substantial, is not surprising: after all, we are facing an energy crisis, inflation, government aid failures and high commodity prices, all of which threaten the cash flows of entrepreneurial Holland . Another study – by credit insurer Allianz Trade – analysed 43 other countries besides the Netherlands on bankruptcy expectations; that study shows that the number of bankruptcies will increase overall by about 51%. In other words, the Netherlands tops the list with the highest expected increase in bankruptcies by 2023.
One explanation for this, says Johan Geeroms, Director Risk Underwriting Benelux at credit insurer Allianz Trade: ” As an open export country,the Netherlands is always ultra-sensitive to international developments. The downturn in the economy hits hard here. Thereby , one could also question government support. Many SMEs complain about its effectiveness. Another factor is that a large number of companies have to repay their corona debts . Almost 300,000 entrepreneurs have a combined debt of over €19 billion.”
Towering energy prices
What also does not help, is that companies also face sky-high energy prices. A survey by the FME, a business association for the technology industry, shows these costs to have risen by an average of 230 per cent compared with early 2022 . And with many energy contracts expiring this year, more and more companies will have to cough up huge amounts of variable energy costs.
The government did draw up a support measure, called thegemoetkoming Energiekosten scheme. But this will only partially help struggling entrepreneurs , according to the FME. Indeed, they argue that only 12 per cent of self-employed people qualify for this scheme; or in other words, almost 9 in 10 Dutch entrepreneurs are left – literally and figuratively – out in the cold.
Bankruptcies to record levels
It will also be difficult for many companies that were able to survive the corona era on government support. Now that that support has been withdrawn, there is a good chance they will still fall over. Also, since 1 October 2022, Dutch companies have to repay deferred taxes; and self-employed people in turn already have to repay part of the TVL and NOW subsidies .
And on top of that: the problem of high debt. For the past two years, potential financiers have not been eager to invest in unstable companies with rattling finances.
All in all , it will be increasingly difficult for many organisations to keep their heads above water ; not surprising , then, that the SME Finance Foundation is already warning that 2023 could be a record year in terms of bankruptcies.
How to stay financially sound?
Dat de vooruitzichten voor bedrijven slecht zijn, zal ook zijn effect hebben op leveranciers, bijvoorbeeld omdat facturen te laat of zelfs helemaal niet betaald worden. Dit zal er voor zorgen dat debiteurenbeheer weer meer het middelpunt van de belangstelling wordt, zo schreef (link naar laatste blog van 2022) Robbert Geluk, Managing Director bij CreditDevice: “Door deze situatie komen er weer klanten die facturen niet kunnen betalen. Zo komt weer meer aandacht voor de debiteur. Zeker ook nu de rente stijgt is het interessant om meer werkkapitaal te hebben.”
A great way to amass that working capital is by increasing your understanding of receivables management to minimise the risk of default. CreditDevice offers you that service using our high-quality accounts receivable management and credit management software, ensuring invoices get paid faster, positively impacting cash flow. This saves time, money and risk – which, in these risky times, is certainly no luxury.
Want to know what we can do for you? Then contact us here.
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