Businesses Writing Off Bad Debts Despite Not Having Credit Insurance
A majority of small firms use profits rather than savings to help achieve growth, highlighting the importance of getting consumers to cough up
53% of UK small businesses have had to write off money owed as a bad debt, despite only 36% having the necessary insurance required to be compensated, according to a report by Company Check.
The survey of 500 business owners pre-Brexit revealed that although 68% of respondents had dealt with at least one non-paying customer at some stage, less than two thirds had any sort of credit insurance whatsoever – meaning there was no hope of reclaiming any compensation whatsoever.
It was further revealed that a majority of small firms use profits rather than savings to help achieve growth, highlighting the importance of getting consumers to cough up and pay.
Natalie Gasson, development manager for the Federation for Small Business, said:
“This is as much a policy issue as it is a cultural problem within UK business. Small firms need confidence to charge interest and complain about late payments. The fear among the smallest companies, particularly when dealing with larger firms, is that complaining about a late payment could result in lost future work which will harm cash-flow for their business.
Worried about non-paying customers? Why not investigate a company before going into business with them?