Recent research has identified the average UK small business is owed £63,881 in late payments, with a further 11% of small firms waiting on between £100,000 and £250,000,
Understandably any delay in payment from customers can impact cashflow issues for small businesses. Short term gaps are more likely oto be able to be addressed without the need for external help however insight from this piece of research suggests the issues are more significant.
Commercial data provider Dun & Bradstreet, who undertook the research, also found:
The research did highlight a potential risk area that small businesses were creating for themselves. A worryingly 36% of firms claimed they don’t perform thorough credit checks on their clients.
Commenting on the matter, Edward Thorne, UKI Managing Director at Dun & Bradstreet, said: ‘Although initiatives like the Prompt Payment Code are helping to highlight the issue, late payments pose a very real risk and can have a significant impact on the financial success of smaller businesses.’
It really does pay to look into the a potential clients payment behaviour before committing to working with them. Not only does it affect your income and ability to invest in your business, but potentially could impact the profile you present to your suppliers.
If you’re concerned that cashflow problems are becoming a more frequent challenge to your business, it’s time to seek advice. The earlier you do, the more likely you are to have more options available to help you resolve and overcome the short-term gaps, like turnaround finance.
Don’t let your cashflow problems snowball to the point you can’t pay your suppliers or continue to trade. HJS Recovery can offer free advice into the most suitable options for your business, and get you back on track. Get in touch with us today on 0800 0141 130.