Non-Paying Customers Leave 1.4 Million Businesses Out of Pocket
Companies in transport and construction sectors most likely to be victims of non-payment with the average firm writing off nearly £12,000
1.4 million UK small businesses are suffering from bad debt as customers fail to pay them money they are owed, according to a report from Bibby Financial Services.
A survey of 1,000 small enterprises, taken before the Brexit vote, revealed that 27% of business owners have written off owed invoices in the past year with the average firm losing £11,829.
Companies in the transport and construction sectors are most likely to be kept waiting for payment, with industry culture regarding the nature of billing and lengthy payment terms suggested as possible reasons for this.
David Postings, BFS Global chief executive, said:
“Bad debt is a chronic problem for small businesses and can lead to staff cuts, delayed investment plans and, at worst, insolvency.
“Following the UK’s vote to leave the EU there is clearly some anxiety among small businesses and throughout the wider economy. But now is the time for businesses to take growth and stability into their own hands and this must start by taking a more planned approach to chasing payment and protecting themselves against the effects of bad debt.”
Wary of dealing with a non-paying customer? Read this guide and learn how to check their accounts first.