New sector research from Bacs Payment Schemes has located that the retail and distribution sector bore the brunt of the 33.6 billion owed to SMEs in late payment in 2011.
Despite becoming the promptest payers themselves according to a latest study from credit insurer Atradius, retailers had been owed 16.6 billion in outstanding invoices final year to underline why the industry has struggled throughout the downturn.
Much more than two in 5 SMEs inside the sector reported they had seasoned late payment in 2011 (42%), with the common company owed a whopping 82,000 at any a single time – more than double the UK typical of 39,000.
Despite these astounding figures, fewer than a single in 3 admitted to getting concerned about late payment.
Somewhat unsurprisingly the manufacturing market, which has endured a topsy-turvy time of items of late, has also struggled to stay away from the late payment climate which has so engulfed the UK’s enterprise neighborhood.
Much more than half of UK manufacturers experienced late payment last year (55%) according to the figures, with 10.3 billion owed in outstanding sums. This translates into the average organization becoming owed 43,000 at any one particular time, with two in five concerned as a result.
The information also revealed the UK solutions sector was broadly impacted, with 52% suffering from late payment. Nevertheless the problem hasn’t matched the depths of the aforementioned sectors, with only 14,000 owed to the average company and 5.9 billion owed to the sector as a whole.
It is clear that late payment is a widespread problem that has verified a significant element in the rising insolvency figures – one thing that is only probably to intensify as far more and much more companies are impacted.
Stringent credit management techniques are for that reason vital in the present economic climate to safeguard your organization against this challenge, from credit checking new and current clients to suspending operate and services where needed.
Provided the challenges in accessing traditional funding facilities such as bank overdrafts and loans in recent occasions, it has been tough for SMEs in particular to compensate for this strain on their cash flow.
But is available according to the latest figures from the Asset Based Finance Association, with advances to its members’ clients reaching 16 billion in Q3 2011. By releasing cash against the worth of a business’ sales ledger just 24 hours immediately after their concern, your business can access the funds that are crucial to development.
They also excel at overcoming late payment as factoring incorporates a devoted sales ledger management service, with the added choice of bolting on negative debt protection.