With big news hitting the headlines on domestic energy price-cap increases, over on the business landscape, firms are already experiencing massive increases in gas and electricity costs (424% & 349%, respectively - data from the Federation of Small Businesses (FSB)). The expectation is that many SMEs will struggle to trade and potentially become insolvent in the coming months as their operating costs become too great.
For several reasons, the wholesale price of energy is at an all-time high following the increased demand following the Covid-19 pandemic and Russia's strike on Ukraine. Many European countries publicly supported Ukraine, resulting in Russia's reaction to reduce the delivery of gas via Nord Stream 1 by 80%, dramatically reducing the supply with no reduction in demand.
Businesses are unprotected by price caps, meaning energy suppliers can pass on their costs to companies. The energy price cap, established by Ofgem, was implemented to protect everyday domestic consumers of electricity and gas.
Ensure that your company is on a fixed-rate energy contract
Confirming that your business is on a fixed-rate energy contract is crucial in reducing the amount paid for energy, as companies out of their contract have seen price rises of over 100% across the past 12 months.
Ensure all outstanding debts are collected
Pursuing any outstanding debts could be crucial to ensure that your accounts stay in the black. Creditsafe offers a Debt Collection Service which can help encourage your debtors to pay using Debt Recovery Letters. If this is unsuccessful, you could pursue further action with our professional debt collection partner, Daniels Silverman, who can implement a bespoke solution to collect those funds.
Monitor credit reports on all of your customers and suppliers
By simply monitoring all your existing customers and suppliers, you can ensure that you protect your business from potential risk and rest easy knowing that your business relationships are secure and reliable. Selecting the 'Monitor' button on any report will give you instant notifications on any changes to any businesses within your portfolio directly into your inbox.
Explore engaging new suppliers to reduce costs
Exploring new suppliers can be daunting, but it could be fruitful to discover whether making new connections could save you money that could help towards energy costs. With Creditsafe's
International Credit Reports, you instantly access reports in over 160 countries, enabling you to verify any potential new suppliers with confidence.