Cremanass Essex Debt and Risk Management
by
Victor Hester
Cremanass – Late Payments Affect Businesses
Paul, Corporate Consultant for Cremanasss in Essex, talks about Late Payments.
Late payments are a persistent problem for small and medium sized businesses in the UK. More than three quarters of credit managers polled do not believe that the Government is doing enough to protect businesses from the burden of late payments and the potential damage it can do to their finances.
According to the research, during Q4 2011 more than half (51 per cent) of businesses have experienced an increase in late payment trade invoices trend. This is most common in private sector businesses with a turnover of up to 50m per annum. While the Government has announced that the recent EU Late Payments Directive, which standardises 30 day payment times, will be fast-tracked, it is uncertain whether this will be enough to reduce late payment and tackle this pressing issue.
Research also reveals that over the past year, 56 per cent of businesses have seen suppliers unilaterally change their payment terms. Meanwhile almost half of businesses (45 per cent) predict that the impact of late payments could inhibit the ability to invest in people and services, it is important for businesses to put safeguards in place against late paying customers.
Cremanass Essex commented on the situation \”the Eurozone debt crisis already impacting on our economy, it is worrying to see that two thirds of credit managers and business owners are worried about their cash flow and see late payments as one of the biggest threat to their stability and growth over the next quarter and beyond.
Having regular credit and risk checks is vital for businesses and it will mean that businesses will be alert to any changes in their customers\’ circumstances that could lead to non-payment in the future. Expecting customers to pay their bills on time because they have done so in the past can leave businesses vulnerable and so undertaking regular credit checks on customers is essential for protecting your business from bad debts, and ultimately, insolvency.
It\’s also important that businesses build up a strong credit rating in order to be able to secure alternative sources of funding quickly should their cash flow take a hit. Bank lending remains challenging and there have been cases when lenders have withdrawn funding to businesses experiencing short term difficulties, causing them to dive into insolvency.
Business and Credit Watch, from Cremanass, can ensure that businesses have the tools they need to manage their debt and risk.
Dealing with slow payers could affect your ability to pay your suppliers on time, or even worse pay your staff. This could result in businesses having to take out expensive overdrafts or loans to make up the short fall. Not paying your suppliers on time could seriously damage your reputation and your credit rating could be affected all through no fault of your own.
By working with our clients, Cremanss have helped get back money that they have been able to get working for them. By doing this they have seen a return on their investment equivalent to approximately one per cent per month.
Contact Paul now for a 30 minute health check.
CREMANASS Ltd. provides a fully guaranteed credit management solution helping you to avoid bad debt,speed up cash flow and boost profits. We give you the tools to do it yourself or we do it for you
Article Source: ArticleRich.com