British SMEs are now more likely to accept excuses from late paying customers than before the recession meaning that many could be suffering from poor cash flow, according to a recent survey.
The survey, commissioned by positivecollections.co.uk, found that:
• Over 260 business professionals across a number of industry sectors participated in the study, commissioned by positivecollections.co.uk, which found:
• Small to medium sized businesses are the most prone to suffer from late payers (with 74% stating that they are likely to accepting late payment excuses).
• 10% of organisations avoid chasing debts in the first place as they are worried about losing future business or simply feel too uncomfortable about broaching the subject.
• Micro businesses (businesses with one to nine employees) are the least likely to worry about debt recovery as 45% claim they are always paid on time.
• 17% of businesses would try to chase debts but avoid legal action as they believe it will be too expensive.
David Green, CEO of positivecollections.co.uk, said: “Interestingly there seems to be a clear trend towards delayed payments which has been made more prevalent since the recession took hold. The fact that so many businesses in the UK have become accepting of this ‘late payment culture’ is certainly a cause for concern as this has implications on the whole business community and economy.
“In some cases, there will be genuine reasons for late payments which are unavoidable but, businesses shouldn’t accept this as somehow ‘inevitable’ or the ‘norm’ because there are ways to combat this and keep your credit control in good shape.”
Green concludes: “The cost of recovering debt does need to be evaluated and we believe the most natural first step is to send a letter from a professional solicitor as this will often solve the problem and urge a debtor to pay. Using a service like positivecollections.co.uk which is linked to a solicitors’ firm means that it is ready to handle the case if it reaches the litigation stage.”
