While the government tries to defend its economic record in anticipation of the legislative elections, figures published by the Banque de France this Thursday reveal an alarming increase in business failures, particularly among mid-sized companies (ETIs) and SMEs ( Small and medium enterprises). These statistics come in a climate of economic uncertainty exacerbated by rising interest rates and persistent inflation.
The increase in business failures in 2024
According to Altares, business failures could reach historic levels in 2024, with more than 60,000 bankruptcies, a record since 2016. This increase is mainly attributed to late payments between companies, responsible for 25% of bankruptcies In France. This situation is aggravated by the reduction in available financing and increasingly strict credit conditions.
The summer period, a critical moment
Data from the Banque de France indicates that the month of September is particularly critical, with 5,413 business closures recorded in September 2023. The summer period, marked by temporary business closures and delays in paying bills, severely impacts companies’ cash flow.
Doubling of late payments in summer
A study carried out by Aria, a fintech specializing in instant invoice financing, shows that late payments double in July and August, going from an annual average of 4.26 days to 8.57 days. These delays can have devastating consequences for the financial survival of businesses during and after the summer.
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Practical advice for businesses
To counter these trends, Clément Carrier, CEO of Aria, recommends that companiesanticipate their billing and avoid billing between July 14 and August 15. Invoicing before June 30 and asking for deposits can also help secure cash flow. In addition, Aria notes a 7.84% increase in transaction volume before the summer period, demonstrating the adoption of these best practices by certain companies.
Need for rigorous preparation
Faced with this period of high vulnerability for French companies, it is crucial to prepare and adapt financial management strategies to minimize the impacts of late payments. The advice of specialists like that of Aria can be valuable allies in navigating through this complex period and ensuring a less tumultuous return to school. Businesses must act now to prepare for a more peaceful summer and secure their economic future.
