Ten signs your agency or client is in trouble

When it comes to your cash flow take no chances, as it is the very lifeblood of your contractor business, writes Sid Home, managing director of Safe Collections. Knowing what to look out for when dealing with a recruitment agency or client can make all the difference, because early action from you, a potential creditor, is always optimal. In reverse order, here are the ten most telling signs that your end-user or agency may be in financial trouble.

10.  Staff exodus from key positions

Like rats leaving a sinking ship, watch for the unannounced exit of company personnel - especially senior management.

9.    Sudden address change

If an organisation is struggling with their own cash flow they may relocate at extremely short notice in an attempt to reduce overheads. This applies to both business and trading addresses.

8.    No answer

This is straightforward. If the phone number for your contact and the head office is not being answered, then there is likely to be a problem.

7.    No reply

Similarly, if your emails aren’t being replied to (even when you aren’t seeking payment) this may indicate something is amiss.

6.    Consistently overdue payments

This is a classic indicator of internal issues with cash flow or a blasé approach to payment. Either way, monitor your situation carefully.

5.    Payment pledge repeatedly broken

Likewise, this is either an indicator of financial difficulties or simply a refusal to pay in a timely manner.  Irrespective, be mindful of your organisations position

4.    ‘Please reissue the invoice to another company’

This request is a classic warning sign. Either the company cannot pay you at this time or they intend to attempt to “dump the invoice” on a different legal entity. Never invoice a different company.

3.    Dishonoured or stopped cheques

This shouldn’t need an explanation as to its significance. A bounced cheque is never a good sign, while a stopped cheque is likely to indicate an issue with cash flow (or with the invoice itself). 

2.    County Court Judgments

If any client or agency has a County Court Judgment lodged against it and you have invoices outstanding, it is vital that you act to recover them immediately.

1.    Multiple warning signs 

If your client or agency is showing more than two of the above signs, monitor them extremely closely.


If they are exhibiting four or more of the above signs, it is imperative that you take immediate recovery action.

For more from Safe Collections please visit their debt recovery page. 

Tuesday 12th Jul 2011
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