Firms owed £18bn

Jan 12 2008 by Henryk Zientek, Huddersfield Daily Examiner

THE money owed to Britain’s small and medium-sized firms rose by £2.6bn last year to £18.6bn, a survey has revealed.

Figures from BACS, the industry body behind the direct debit system, showed that the average small and medium-sized firm is owed £30,000 at any one time.

Almost a fifth of firms now employ someone to chase overdue invoices, but the average company loses about 17 days a year on this task.

The survey showed that firms in Yorkshire spend an average of 2.7 hours a week or 19 days a year chasing unpaid bills.

The average firm in the region is owed £12,000 by tardy customers.

Nationally, Greater London has the biggest late payment problem – with firms owed an average of £51,000 and spending an average of 5.5 hours a day or 38 days a year trying to get their money.

Michael Chambers, managing director of BACs, said: “These firms need to be much smarter about tackling late payments.

“They should use a range of solutions, including automated payments, to stamp out the problem once and for all.”

Measures to help reduce late payment include credit checking clients and suppliers before completing orders; encouraging payment direct to your bank account; rewarding prompt payment; using late payment legislation to charge interest on overdue bills; and setting a good example by paying your own bills on time.