The annual NCI client survey was undertaken at the end of 2024, with one intriguing question being asked specifically to credit managers across Australia and New Zealand. The question:
‘What is your biggest business concern for 2025?’
Well, the results are in, and here are the top 7 that have been identified.
1. Economic conditions
The biggest issue identified was the impact sluggish economic conditions were having on increasing non-payments, declining sales and growing insolvencies. Attention was directed to the construction industry slowdown, low demand for services, and delayed projects. Uncertainty in global markets, concern about potential USA tariffs and ongoing inflation challenges, remain top of credit managers’ minds.
2. Cash flow issues
Many comments homed in on struggling customers being able to pay on time, the time spent on managing overdue debtors, repayment plans, and the impact of the ATO aggressively seeking recovery of overdue taxes. There were specific concerns around limited cash being received during the holiday periods, impacting payments during January, February and March 2025.
3. Sales revenue
Never before have I seen so many credit managers worried about their sales teams! But clearly credit managers are concerned about shrinking sales due to weaker demand and other challenges.
4. Customer insolvencies
2024 hit record insolvency levels and concerns remain with the prospect of more customers surrendering to difficult business conditions in 2025. The impact of insolvencies, the struggle to maintain sales, and increasing bad debt provisions featured in many responses and clearly, in the eyes of credit managers, are going to remain challenges in 2025.
5. Business operational issues
This concern highlights ongoing difficulties in recruiting the right staff and skilled labour. Managing costs relating to employees, was a comment that featured throughout the survey responses along with managing supply chain delays leading to disputes with customers.
6. Specific industry concerns
In this category, industries such as construction and retail were consistently mentioned. The economic slowdown and consumer spend seems to remain tight and a prolonged period without interest rate cuts or relief in discretionary spend availability could see more retailers fall over. Many comments on retail in particular, came from credit managers in New Zealand, who feel a greater impact in these sectors.
7. Climate and cyber risks
These risks clearly can have a big impact on cash flow. Climate conditions - For our clients in the agriculture sector in particular, difficult and unusual weather conditions play a big part in their business both in sales and the ability to collect payments.
Cyber scams – such as invoice fraud, digital deception and payments on credit cards/online is clearly a worrying factor for many credit managers. Cyber crimes are increasing year on year and is a risk that credit managers can assist in minimising for their businesses.
We're here to help.
When economic conditions remain predictably unpredictable, comfort comes from gaining some level of certainty against the otherwise unknown risks of business. NCI’s services provide comfort in reducing concerns, not only after an insolvency has occurred, but also prior risk management protection. From digitally opening a new account through NCI’s electronic application Credential, and providing more information to help make the right decisions when opening accounts, to collecting overdue debts and claiming under your insurance policy so profit isn't lost, these are all areas where NCI can support credit managers and together combat the top concerns of credit managers in 2025.
For more information contact:
info@nci.com.au
1800 882 820
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