Recent research showed that SMEs write off as much as £14,000 a year in bad debts. With figures like this in mind, and the economy still emerging from recession, businesses cannot afford to be complacent when chasing payment.
As a result, I have seen a number of clients who have been forced to ask for my help on just such an issue. Companies often reach February and realise they are now short of working capital, and stuck with a backlog of invoices to chase.
This could often be due to the debt being owed from a foreign company or organisation. One major bank estimates that £9billion is owed to UK businesses from overseas on any given day, and that the security of 18 per cent of businesses is under threat from invoices that have not been settled.
My advice at this point is always that businesses must look to chase invoices as soon as possible, and seek help from their advisers where appropriate, to avoid any long-term effects. Continue invoicing and chasing funds as normal throughout the year to avoid this happening and avoid this shock in January.
Debt recovery manager, Napthens solicitors.