How Debt Recovery Can Fill the Payment Gaps for SME’s
As concern continues to grow over the likelihood of a double dip recession and the incoming RPI linked business rate rise next year there is genuine worry amongst small and medium sized enterprises (SME’s) about the increase in business costs and the likelihood of further unpaid invoices.
Combine this with the current state of the economic climate, the difficulty in borrowing from banks and the already large amounts of unpaid invoices and overdue accounts and it wouldn’t be hard for this fear amongst SME’s to become pandemic. With business insolvencies already at high levels the lack of support from banks lending to SME’s which could ease cash flow problems stands out even more.
One of the biggest issues facing SME’s currently is late payment of invoices. This increase in the amount of time taken to clear an outstanding balance is known within the industry as a “payment gap” and payment gaps themselves are at record levels with recent figures revealing that the average payment gap currently stands at 22 days! Furthermore, a large amount of invoices that go past this period don’t see any payment whatsoever.
This is where debt recovery can help.
With many small businesses the primary focus is on the growth of the business. The time and resources involved in chasing outstanding invoices are often not there, or, if they are, is time and resources that could be better utilised elsewhere in the business. By utilising a debt collection agency, such as Federal Management, many SME’s see an immediate boost to their company simply from the time that has been freed up which allows them to focus on growing their business while having the peace of mind and security in knowing that their outstanding invoices are being actively recovered by the professionals.