New research claims that small businesses in the UK are collectively owed almost £50 billion in unpaid invoices.
On average, the amount owed to a small business by suppliers stands at £8,811, meaning that across the nationwide community of 5.6 million small firms the amount of unpaid bills equates to £49.3 billion.
Furthermore, the new study by software firm Xero indicates that 48% of invoices issued by small firms are paid after their due date. Meanwhile 26% of small business owners find it difficult to pay their own suppliers as a result of unpaid invoices.
There’s no doubt that unpaid invoices are the scourge of small business growth in the UK. Debtors are an unwelcome drain on entrepreneurs’ resources and their profits.
Here, Colette Rhodes, Director of Debt Collection Services UK, gives five reasons why small business cash flows can benefit greatly from the support of a tailored debt recovery service:
Focus on recovering one large invoice
If your small business is struggling to obtain payment for one significant invoice, a debt recovery service can home in on a single late payer that could be creating a roadblock to your business’ growth.
There are still too many large businesses that take too long to pay small firms and a debt recovery service can help achieve the right outcome and protect future business opportunities.
Get professional credit control support across your entire sales ledger
Improve the efficiency of your business’ entire sales ledger by employing a debt recovery service to get involved at the early stages of your billing process.
Having professional credit control support at hand helps to identify areas where improvements could be made to reduce risk, whilst pinpointing ways to raise immediate working capital from existing debt.
Credit checking facility can reduce the number of aged debtors
A credit checking facility can also be operated alongside debt recovery services and undisclosed credit control. This can help small businesses to keep their aged debtors to a minimal value.
Skilled mediation that maintains customer goodwill
It’s hard when you’re a small business owner that just wants to be paid fairly without losing long-term custom. Debt recovery services can provide a soft approach where required to maintain customer goodwill.
In some cases, your debtors may also be going through a difficult period, so a debt recovery service can work closely with them to ensure your debt is prioritised and paid as quickly as possible.
Retained solicitors that can escalate legal action if needed
Not all matters can be solved through mediation. When a harsher approach is needed to retrieve unpaid invoices and improving your cash flow, debt recovery services tend to have retained solicitors on-hand to assist with disputed matters.
Where necessary, a case can be moved swiftly to legal action and enforcement to get the right result for your business.
To find out more about how our partnered debt recovery services can act as an extension to your business’ own credit control department, arrange a free initial consultation today by calling your local TaxAssist office on 020 3196 4888 or drop us a line using our online enquiry form.
By Jo Nockels FCCA
Last updated July 2019
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