Bad Business Debt Warning Issued for New Year Ahead
UK Businesses are being told they may face a financial festive hangover in the form of non paying bad debtors if preemptive measures are not taken.
A Senior Commercial Debt Collection expert from Federal Management has predicted that December and January will represent the worst two months of the year for non payment of business debts.
A combination of bad weather, reduced productivity and Christmas holidays will mean that businesses find their customers either avoiding them or promising payments before Christmas that often, will not materialise till mid January.
Whilst it is the season of goodwill, failure to take adequate steps to combat the aforementioned can potentially lead to a serious hangover for businesses, in particular SMEs, who historically find that cash flow has considerably deteriorated by the end of January.
John McGovern, a Senior Collections Officer said:
“UK businesses of all kinds suffer financially at this time of year with the slowdown in payment by their customers. Many businesses consider it to be unavoidable but given the current economic climate, that should not be the case.”
“Credit controllers should be contacting customers in advance of invoices falling due to remind them of the payment date and that they expect to receive payment on or before that date and not after.”
He further adds:
“We understand that it is Christmas and there maybe a degree of leniency however, in the current economic climate, it is essential that preemptive measures are taken by Companies to prevent the accruing of bad debts. Just because it is Christmas, that is not an excuse for the non payment of outstanding invoices and accounts”
For further information on the recovery of overdue accounts, bad debts or Debt Collection in general, contact Federal Management for free advice and assistance.