According to a recent study, bad debt write-offs have gone up from 1.5% to 2.5% year-on-year due, in part, to economic uncertainty.
The Western Europe Payment Practices Barometer research report, carried out by trade credit insurer Atradius, examined how today’s economic uncertainty is affecting payment practices in the UK.
Key findings from the study included:
- 35% of invoices remain overdue on their due date.
- Bad debt write-offs have risen year-on-year from 1.5% to 2.5%.
- Average payments arrive 44 days after the invoice.
- Stricter payment terms are being used.
- 74% of businesses are seriously affected by late payments.
- There has been a 45% jump in sales on credit.
The report found that in response to the UK’s late payment culture, many businesses are now tightening their payment terms, with the average invoice due after just 20 days, down from 24 days year-on-year.
Late payments are a huge concern for UK businesses, with 74% of businesses experiencing significant problems caused by late payments and 45% of businesses having to delay payment to their own suppliers because of unpaid invoices.
With the ongoing saga of Brexit still looming, the study found that over a third of businesses expect payment practices to worsen over the coming months and over 53% expect a significant increase in late payments.
In today’s uncertain economic climate, it’s essential that businesses stay on top of their credit management, restricting customer credit limits and carefully managing late payments.
Here at Churchill Recovery Solutions we help businesses in virtually every sector to create strategies and processes for efficiently collecting the funds owed to them.
If you require assistance refining your business’ credit management process or help with debt collection, give our team of experts here at Churchill Recovery Solutions a call on 0333 320 0748.