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Don’t Write off Debts Owed to your Business

In our News Roundup last week we revealed the worrying fact that a massive 40% of small businesses here in the UK have had to write off debts during the last financial year and don’t actually know the exact sum that they are owed by debtors.  A recent survey of more than 700 business owners disclosed that the average business is owed a total of more than £62,000, with 82% of small companies still having balances outstanding from their debtors.  With cash flow being such a vital issue for SMEs, this is an alarming trend so today we’re going to take a closer look at this subject.

Businesses here in Britain wrote off a combined £5.8 billion last year, working out at more than £21,000 per day!  This is not only bad news for business owners, but bad news for the economy as a whole, especially in this post-Brexit atmosphere of uncertainty.  Small businesses account for more than 99% of all private sector businesses and are the backbone of the UK economy.  Total employment in SMEs accounts for 60% of all private se4ctor employment in Britain and 47% of all private sector turnover.  In fact, SMEs account for at least 99% of businesses in every main industry sector with just under 20% of these operating within the construction industry.

With small businesses accounting for so much trade, industry and employment here in the UK, we will depend on these companies in the coming years to ensure that Britain remains a major player on the world stage, whatever the political outcome of the Brexit vote.  As we know, smaller businesses rely heavily on a steady and stable cash flow in order to stay in business so the fact that so many of them are having to write off debts in this way is an issue that should be worrying all of us in the UK.  We need to support our small businesses in order to make steady progress in the global economy in the coming months and years.

When quizzed about the reasons for writing off the debts owed to them, business owners gave the following reasons:

  • Suppliers facing insolvency and being unable to pay out what they owed (29%)
  • Thinking that suppliers did not have the funds necessary to pay their debts (17%)
  • Not having the time or funds necessary to chase up the debts (11%)
  • A reluctance to damage a future relationship with a customer (10%)
  • Not knowing how to go about reclaiming the payment owed (3%)

If you’re a small business owner and you’ve been struggling to maintain a steady cash flow as a result of debtors and late payments, why not get in touch with us and let us help you?  Here at Access Credit Management we understand that you may not have the necessary knowledge that will enable you to collect monies owed to you and we also appreciate that you may be concerned that chasing the debt will end up costing you more than you’re actually owed.  That’s why we operate on a no-win, no-fee basis - to give you the peace of mind that you deserve and that will allow you to concentrate on what you do best – running your business, while we take care of the debt collection process for you.