As the UK has fallen into a technical recession, small businesses are finding it more and more difficult to obtain credit from funders to keep their businesses afloat. Many small business, 27%, rely on keeping afloat by using credit cards to pay bills whilst they await payment from suppliers. The interest rates on a lot of cards can be as high as 33%. Financial instability can obviously lead to severe debt issues for many small businesses. The issue is compounded by the fact that small businesses are having to wait for sometimes several months to be paid by their corporate clients.

The Government is in the process of putting a new fair payment code in place, but that could take many months to implement. The issue would then be that it doesn’t address those firms who don’t sign up for it.

SME’s lose approximately 56 million hours of lost productivity and potential costs of £22,000 per annum chasing payments, and approximately 50,000 small business are closing every year – many due to cashflow problems caused by late payment.

Keep on top of the figures
There are many low cost bookkeeping software packages on the market that will help you keep track of how much you are owed by clients and how much you owe your creditors. Tracking exactly what you are owed beyond offered terms is the point where you can effectively start to take action. Also, sole traders or small businesses often confuse business funds with personal funds, so having a low cost accounting or bookkeeping package can be very useful.

At this point ask yourselves how much time can you really afford chasing the debts yourself?
Many small businesses have owner/managers who are probably over-stretched as it is with many other business tasks.

Bringing in help
Debt management and collection businesses operate on the basis of collecting debts with the least fuss possible. It is in their interest to instigate payment of overdue invoices as quickly as possible – safeguarding their own cashflow by doing so.

A skillset of understanding data, keeping accurate records, compliance, and above all communication expertise, enables a debt collector to avoid expensive court action or long waits for payment, and the majority of businesses both large and small find having a trustworthy and professional debt management business available for both advice and instruction can be just as important as say legal, hr or accountancy services.

Premium Collections are always happy to give free advice to consumers and companies that have issues with overdue payments.

For more information contact Paul Daine on 0161 962 4695
enquiries@premiumcollections.co.uk
Premiumcollections.co.uk