As the economic landscape continues to shift, staying ahead of potential credit risks is more important than ever. Recent figures show Tasmania recorded 37 bankruptcies in the March quarter of 2025 — a 27.6% increase from the same period last year. While this number remains modest, it highlights the need for vigilance, especially for businesses offering credit.

One of the most effective ways to protect your business is by recognising early warning signs that a customer may be in financial distress. 

Here are some red flags to watch for:

Common Warning Signs

• Slower or inconsistent payments: A long-standing customer suddenly starts paying late or only partially.
• Excuses or changes in tone: Frequent stories about internal changes, cash flow issues, or “the cheque’s in the mail.”
• Staff turnover: Key contacts leaving the business or changes in decision-makers could signal instability.
• Unusual purchasing behaviour: Either sudden increases in order size or a drop-off in orders can indicate a problem.
• Negative industry news or rumours: Information spreads quickly in small communities — don’t ignore what you hear.

What You Can Do

• Reach out early: A friendly call to check in can sometimes uncover underlying issues and give you a chance to work together on a solution.
• Review your exposure: Assess whether credit limits or payment terms need to be adjusted.
• Request updated information: Ask for recent financials or conduct a fresh credit check through services like Equifax.
• Equifax Alert Service: Setting an alert for businesses when you sign them up can be an effective way to be advised when there are changes to the customers business such as a change in directors or adverse entry in trade history.
• Engage support services: A Field Call by our experienced TCS team can help you gain on-the-ground insights into a customer’s situation.

Taking proactive steps can make all the difference between a recoverable account and a bad debt. If you’re unsure how to proceed with a slow-paying or inconsistent customer, we’re here to help.

Need support?

Contact your Account Manager or call us on (03) 6213 5580 to explore how we can assist.