Companies 'should guard against fraud and bankruptcy'

News Article - 09 January 2007
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Businesses, especially those dealing with IT, should protect themselves better against fraudsters to guard against bankruptcy, experts have advised.

The calls follow a study conducted by market researcher Experian which showed that more business failures took place in sectors where companies dealt with IT.

According to the research, corporate fraud was to blame in many instances of companies going into administration during 2006.

"Businesses must make the necessary checks on customers, prospects and suppliers to ensure that they have warnings about those that may have cashflow difficulties," an Experian spokeswoman told CRN.

Founder of business advisory service ChannelMoney, Nitin Joshi, said that companies needed to communicate with their suppliers more thoroughly and be aware of how to organise their finances.

Last year, Experian reported that corporate failures in the UK rose by 10.7 per cent, increasing to 20,067. The business services sector experienced the highest rise of almost 25 per cent.

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