CreditorWatch Business Insights

Managing Director of Open Analytics, James O'Donnell, joins CreditorWatch's Head of Content, Michael Pollack, to unpack the latest data on business credit risk. 

The numbers show a deterioration in business conditions and home owners coming under increased mortgage stress.

Subscribe to the CreditorWatch Business Risk Index for free and receive the results in your inbox every month.

Join CreditorWatch's Dominic D'Andrea, Key Account Consultant and Paul Mead, PPSR Specialist, as they take you through the ins and outs of portfolio health checks, how to identify risky customers and how to protect your business.

Customer details change. They move address, their business name changes, their credit rating drops or increases, and sometimes even close shop.

Changes to a customer’s details may change their level of risk, so you need to act accordingly to minimise your exposure.

How are you keeping up to date with all the changes across your customer base? See how you can quickly keep up to date with changes across your entire customer database with CreditorWatch.

You can also subscribe for free to the CreditorWatch Business Risk Index to get the results in your inbox every month. No spam!

Several leading indicators in the May 2023 CreditorWatch Business Risk Index (BRI) show Australian businesses are coming under increasing pressure.

External administrations, B2B trade payment defaults, court actions and credit enquiries are all trending sharply upward as Australian businesses grapple with rising interest rates, high inflation, decreasing demand and declining forward orders.

CreditorWatch Chief Economist, Anneke Thompson’s view is that the RBA is unlikely to consider lowering interest rates until at least mid-2024, given core inflation remains stubbornly high.

The index results are consistent with other economic indicators such as the NAB Business Confidence Index, which is showing an accelerating decline in trading conditions.

On a regional level, the Business Risk Index data for the past 12 months has revealed that three of the five biggest movers down the index are all adjoining – Wyong, Gosford and Lower Hunter.

Sign up for free monthly CreditorWatch data insights here.

CreditorWatch Chief Economist, Anneke Thompson, and Director of Open Analytics, James O’Donnell, discuss the latest CreditorWatch data insights on Australian businesses and the outlook for the remainder of 2023. Hosted by Michael Pollack, Head of Content at CreditorWatch.

How would you like a free resource that tells you how risky your customers are compared to the industry average? Well here it is.

In this episode we hear from James O'Donnell, Founder of Open Analytics and creator of the CreditorWatch Portfolio Risk Benchmarking Report. This free report from CreditorWatch allows you to compare the riskiness of your customer base against four key measures:

Credit Ratings (CreditorWatch RiskScore) – creditworthiness of entities in your portfolio.

Geographic Risk – risk related to the location of your customers.

Business Maturity – how long your customers have been registered businesses.

Business Type – based on criteria such as private/public/sole trader/GST registration status.

If you are a commercial lender or have a business with a turnover of at least $250 million, you can request a copy of the report here.

CreditorWatch Chief Economist Anneke Thompson takes us through the November 2022 results for the Business Risk Index.

The highlights for November include:

B2B trade receivables are down 16% quarter-on-quarter.

Credit enquiries are up 87% YoY and are up 61% since last month.

External administrations increased 26% since last month and are up 24% year-on-year.

Month on month B2B payment defaults continue to show a high degree of volatility decreasing by 25% from last month, whilst following a generally increasing trend.

Court actions are down 6% year on year.

Yarra Ranges in Victoria is the region with the lowest insolvency risk (across regions with more than 5,000 businesses), followed by Cottesloe-Claremont in Western Australia.

The Western Sydney regions of Merrylands–Guildford and Canterbury are the regions at highest risk of default across Australia (for regions with more than 5,000 businesses).

CreditorWatch CEO Patrick Coghlan says businesses are right to take a cautious approach ahead of the Christmas/New Year period.

“Flat year-on-year trade growth in the month of November points to subdued trade activity in December, however, it appears that the RBA’s rate rises this year are beginning to bite and having the desired impact on inflation. There are still a lot of challenges out there for businesses but bringing inflation down would bode well for 2023.”

CreditorWatch was recently certified as a Great Place to Work and also made the AFR BOSS Best Places to Work list for 2022.

So how did we get there and, more importantly, how to we stay there?

CreditorWatch CEO Patrick Coghlan and General Manager of People and Culture, Fiona Crawford, share their insights into what makes a great place to work and the importance of authentic and transparent leadership, employee empowerment, inclusion and non-work related personal growth initiatives.

Like the rest of the Australian economy, the construction industry was getting back on its feet after the worst of the pandemic. But the sector has now been hit by a perfect storm of supply chain disruptions, cost blowouts and staff shortages as inflation and interest rates rise.Many of these forces, particularly cost increases, are beyond the control of construction companies. But construction also has major industry-specific challenges. Construction has the worst late payment record of any industry. About 12 per cent of construction businesses are more than 60 days in arrears on their payment to suppliers. Fixed-term contracts are also placing cost pressure on contractors.The risk is that construction collapses cascade down, creating a chain reaction of failed businesses. That could have a serious impact on Australia’s economic recovery.In this episode of Business Insights, Patrick Coghlan, CreditorWatch CEO; Anneke Thompson, CreditorWatch Chief Economist; James O'Donnell, CreditorWatch Data Analyst and Ginette Muller Director of GM Advisory discuss the findings from our 'Cracks in the Foundation' construction white paper and the outlook for the industry for the remainder of 2022.

Economy at turning point as positive trends continue;

Grim outlook for flood-affected regions

In our latest episode, we present the January Business Risk Index results and analysis. CreditorWatch CEO Patrick Coghlan and Chief Economist Anneke Thompson discuss the key insights.

Key Business Risk Index insights for April:

Trade receivables and credit enquiries continue to trend upwards, indicating the broader economy many have reached an inflection point.

Average trade receivables for April were at their highest level since July last year.

Credit enquiries decreased from March to April but are still up 30 per cent quarter-on-quarter.

Multiple adverse impacts will likely temper this positive data over the coming months.

The Business Risk Index national default rate remained flat at 5.8 per cent in April, however CreditorWatch forecasts a continued rise across 2022.

There was stabilisation across industry default rates in April.

Court actions decreased from March to April but are still up 12 per cent year-on-year.

Victorian Grampians is the lowest insolvency risk region with greater than 1,000 businesses.

Western Australian wheat belt is the new lowest insolvency risk region in the country overall.

The Western Sydney regions of Bringelly - Green Valley and Merrylands – Guildford are the highest risk regions in the country.

Insolvency rates in areas heavily affected by the recent floods are forecast to rise significantly over the next 12 months – 36 per cent in the Lismore area (Richmond Valley – Hinterland) and 14.5 per cent for Brisbane’s Rocklea – Acacia Ridge area.

Register to be the first to receive monthly insights from the Business Risk index at creditorwatch.biz/businessriskindex.

Our latest episode of Business Insights is the third in a three-part series on how SMEs can best prepare themselves for uncertainty using the 3 Ps of preparation: processes, policies and procedures, and protection.

Our guest for the series is an expert in helping businesses with best-practice preparation: Natalie Ledlin, Solicitor Director at Ledlin Lawyers. 

In our third episode on protections, Natalie takes us through how to protect your business if something goes wrong with your customer, and how to take security over the assets that your customer has or that the directors might have.

Contact information: [email protected]