EU plans to make small firms exempt from filing accounts could lead to a “massive and damaging” retraction of credit lines to smaller resellers.
The proposed plans will mean firms with a turnover of less than €1m (£870,000) will not be required to submit accounts.
P&A said this had caused “real concern” among industry suppliers and argued they are right to be worried.
“We think it will cause absolute chaos in the IT industry if it is introduced and potentially lead to a massive and very damaging retraction of credit lines to smaller resellers,” said Laurie Beagle, divisional director of P&A.
Beagle said the exemption would mean suppliers have less information available to them.
“As a result, vendors and distributors in particular, are likely to adopt a much tougher and risk-averse approach to extending new credit lines,” he said, adding that the problem is exacerbated by the high volume of small channel firms and the channel’s dependence on credit.
However, distributors CRN contacted seemed relatively chilled about the plans.
Tracey Perkins, group credit services manager at Midwich, said: “Anything like this makes our lives a bit more difficult.
“But for these firms [that have a turnover of under €1m] we wouldn’t want regular information anyway, and if we did have concerns then we would just pick up the phone.”
Mike Bienvenu, technical director at Softek, questioned the EU’s strategy, arguing that filing accounts protects small firms in the long run. However, he was also relaxed about the potential change in policy.
“We always do due diligence before opening credit accounts, but we try to be as flexible as possible when dealing with new reseller partners, some of which may be in their first year of business and not filed accounts anyway,” he said.
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