In this issue:
What's at risk if a client claims bankruptcy, managing preference claim risk and simple steps to protect your company, and uncovering potential credit risks.
Bankruptcy Preference Claims—The Letter No One Wants To Receive
As the country continues to struggle with difficult economic times, some of our clients have expressed concerns about the financial strength of their own customers. A weak economy can lead to business failures—and when the businesses that fail are your customers, it can place your staffing company at risk.
When a business declares bankruptcy, a common misconception is that staffing companies have a priority status for any unpaid invoices because the invoices are for wages. This is not the case. Unless the claim is secured in some way, the invoices are considered a “fee for service” and are not given a priority status.
