A Quarter Of SMEs Have Bad Debt Says Survey
Bad debt is proving to be major problem for UK businesses with a quarter reporting bad debts and the situation showing little signs of improvement between 2014 and 2015 according to a survey by Bibby Financial Services.
The number could include up to 1.3 million SMEs in the UK, which will have an impact on the ability of those business to grow or even, in some cases, to continue trading.
One of the biggest groups of businesses likely to be affected are those belonging to the £1 million in revenues bracket. A third of those business have suffered bad debt which will clearly have a knock on affect to their suppliers.
Some of the detrimental affects on businesses suffering from bad debt are lower profits and the threat of insolvency when debt recovery is delayed. Chasing up payments early could solve many of the problems faced by these businesses which is why hiring a debt recovery to do the work as early as possible in the process can save a lot of problems and costly court action later on.
Of course doing research on the businesses you intend to trade with is a good idea from the outset. There are plenty of online resources available to check out a company’s financial health and history.