A total of 351 industrial companies were declared bankrupt in 2024, a significant increase from 270 bankruptcies in 2023. This is the highest number since 2016 and a clear indicator of the growing financial pressure within the sector. The fourth quarter of 2024 was particularly striking, with 104 bankruptcies declared, 50 more than in the same period a year earlier. In addition, recent figures show that February 2025 saw relatively the most bankruptcies recorded in the industry. These trends underscore a deteriorating financial situation that cannot be ignored.
Financial developments in the Dutch metals sector: complex challenges
The metals sector, with its branches such as metalworking, mechanical engineering and suppliers, is strongly intertwined with the international market. This makes the sector vulnerable to global economic fluctuations.
One of the most pressing issues is the high volatility in commodity prices. For example, the prices of steel, aluminum and other metals have increased significantly in recent years. For example, steel prices increased by more than 70% between 2020 and 2022, while aluminum prices increased by about 60% during the same period. Since 2023, we continue to see strong price fluctuations of up to 10% per month at times. This volatility leads to unpredictable margins and great uncertainty for companies. Especially companies with long-term contracts without flexible price agreements experience considerable financial pressure as a result, because they cannot directly pass on higher procurement costs to their customers.
In addition, labor costs have increased significantly. This is due to collective bargaining increases and the scarcity of technical staff. The shortage of qualified workers is even forcing some companies to turn down orders, inhibiting sales growth and affecting profitability. At the same time, we see companies increasingly investing in sustainability, such as energy-efficient machinery and circular production processes, and in digitalization through automation and ERP systems. These necessary investments require healthy cash flow or external financing.
Payment discipline within the chain is also declining. Due to geopolitical tensions and the interest rate policy of the European Central Bank, buyers are paying their invoices at an increasingly slow pace. This puts additional pressure on companies’ working capital, further limiting their financial flexibility.
The critical role of effective receivables management
In this challenging economic situation, good accounts receivable management is essential to the financial health of companies in the metals sector. Prompt payment of invoices reduces companies’ reliance on expensive external lines of credit. This is particularly important with the often large pre-investments required for machinery and raw materials. In addition, careful receivables management reduces the risk of default through creditworthiness checks and active monitoring of outstanding items.
A solid debtor position also strengthens companies’ bargaining power with suppliers and banks. Companies that show that they have their finances in order can count on more favorable terms and discounts. This results in lower costs because there is less need for factoring, collection processes or legal proceedings, and because interest and financing charges decrease thanks to faster availability of cash.
Practical resources and strategies for accounts receivable management
To make accounts receivable management effective, companies in the metals sector can employ a number of proven strategies. The use of external credit information, for example from specialized parties such as CreditDevice, helps better assess risks and set credit limits per customer. Invoice automation and digitization speed up the invoicing process, reduce errors and ensure timely follow-up.
It is also important to have a tight accounts receivable policy with clear and legally enforceable payment terms, for example, 30 days net. Proactive communication with customers, such as calling before the due date (pre-dunning), helps prevent late payments. For large financial risks, credit insurance provides an additional layer of protection and provides insight into customers’ creditworthiness. For temporary liquidity shortages, factoring can be a useful solution, provided its cost is carefully monitored.
Conclusion: receivables management as a strategic necessity in a challenging industry
The Dutch metals sector is in a financial phase characterized by rising costs, uncertainties and a challenging market, but also by innovation and investments in sustainability and digitalization. With margins under pressure and an increasing need for healthy cash flow, good credit management is no longer a luxury, but an absolute strategic necessity. It enables companies to improve their liquidity, manage credit risks and create room for growth and future-proof investments.
