Credit is traditionally the lubricant of both domestic and international trade – allowing the purchaser time to pay following delivery of goods or services.
In benign economic times, the risks associated with trade credit can be mitigated relatively easily – although some risks are always unforeseen – through the relationships and trust that are built up over time between supplier and customer. When the economy turns sour, as it has over the past year or more, the risks associated with trade escalate, but so does the value of credit in ensuring that trade can continue to flourish.
An additional risk to the supplier during an economic downturn is that credit decisions based on past trading experience with a customer may no longer provide an accurate barometer of the customer’s current financial stability. We’ve seen, throughout the recession, examples of businesses with a previously unblemished financial record suddenly finding themselves in difficulties: in the worst cases ending in insolvency, leaving a string of unsuspecting creditors.
Despite the high wage levels in Denmark, Auger says he is more than satisfied with his staff. “Good salaries in return create satisfied personnel,” he explains. Dell are just one of a raft of companies that have set up shop in Denmark – a country that is fast becoming the location of choice for those who value quality of life.
Some of the biggest names in business have a foothold in this outcrop of continental Northern Europe; Siemens, Bayer, Sanofi Aventis, Microsoft, Motorola, IBM, and Samsung to name just a few.
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