According to a recent survey by Lloyds Bank Commercial Banking Business in Britain, British SMEs are owed more than £500bn in outstanding invoices which represents an increase in more than 70% over the last two years.
The survey suggests that the problem is only likely to get worse during 2016 with 30% of small businesses expecting more of their customers to demand deferred payment terms within the next six months.
About one in six (17%) of SMEs admits having cashflow problems, compared to 19% in 2014. In all, 31% said that late payment was the biggest cause of cashflow difficulties and a further 11% blame defaults by customers. The average SME is now owed £100,000 in outstanding invoices compared to £60,000 in 2014.
The survey also reveals some interesting facts about assets. Businesses in London and Essex own the most valuable assets – £670,000 worth, but own the lowest proportion of those assets outright at 72%. By contrast, businesses in Bristol, Somerset, Devon and Cornwall own the least valuable assets – £520,000 worth, but own the greatest proportion of those assets outright at 82%.
We all have people who don’t pay their bills (yes, including solicitors’ firms). If you would like some help and advice in connection with collecting a bad debt, please contact Georgina Bradley on 01208 72328 or firstname.lastname@example.org for a free initial chat.