Credit managers have slammed the UK government over the lack of protection offered to businesses against late payments.
Over half (51%) of UK small and medium-sized enterprises (SMEs) experienced an increase in late payments during 2011, while 56% of businesses have seen suppliers changing payment terms, according to new research.
In response, over three quarters of credit managers polled in a survey by Graydon UK said they did not believe the government is doing enough to protect businesses from the burden of late payments and the potential damage it can do to their finances.
Gordon Skaljak, external spokesperson for Graydon UK, said: “It is concerning to see that two thirds of credit managers are worried about their cash flow and see late payments as a threat to their stability and growth over the next quarter and beyond.
Almost half of businesses polled (45%) felt the impact of late payments could hinder investment in people and services. We believe at Amril that Credit Management should not be seen as a cost but a benefit, contact us and we will explain.
The late payment issue is most common in private sector businesses with a turnover of up to £50m per annum, and while the government has agreed to fast-track the recent EU Late Payments Directive, which standardises 30 day payment times.
The flowchart represents each event in the receivables conversion period. Shortening the receivables conversion period is an important step in accelerating your cash flow.
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.
At Amril we fully understand the frustration of late payment and we can help your business.
Amril believe there is a massive amount individual businesses can do in reducing late payment, and it is not wise relying on government legislation to combat late payment on its own.
A business must look internally at how the process of collections are dealt with by using stringent policies and procedures, making sure credit balances are controlled. It is imperative that Sales and the Credit Control teams work together, speak to Amril for a free consultation and let us show you the massive savings you can make.
At Amril we can help you increase your Business Nett Worth, Credit Rating and most importantly Cash Flow by reducing your Liabilities, Late Payment and Bad Debt by bringing in a culture of balance for both the customer and supplier.
As a full cycle Credit Management company we can support your growth without alienating your customers.
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