Thousands of small firms 'rely on one client'

Date: 2nd June 2009

Up to 350,000 small businesses rely on a single customer for three-quarters of their revenue, it has been discovered.

An investigation by Close Invoice Finance (CIF) also found that a third of smaller firms are not protected against bad debt or customers that default on payments.

As a result, more managers and owners could turn to accountants for support on how to boost their cashflow during the economic downturn.

Chief executive of Close Invoice Finance David Thompson said: "By relying heavily on one single customer, companies put themselves at serious risk of business failure should this customer fall into financial difficulty.

"One company's financial downfall can mean bad debt has a domino effect and will precipitate another business's collapse."

Last week, a study by Cattles Invoice Finance discovered that three-quarters of small businesses do not credit check new clients before signing contracts.