Cost of bad debt for UK Companies Rises

British companies are writing off tens of thousands of pounds every year in bad debt because of customers not paying their bills.

According to new research from Leeds University Business School, small and mediumsize enterprises (SMEs) write off on average £14,000 each year in bad debt. Based on a conservative 5% profit margin, they would have to drum up additional sales of some £280,000 to cover the loss.

Over one in five of all UK businesses admit that bad debt is now a large problem, with around a third of all companies admitting that late payment is also a serious issue.

There is also increasing concern over bad debts from export customers, with over one in seven SMEs regarding it as a serious concern. With the number of insolvencies in the UK steadily rising, it is all the more important that companies have systems to minimise the risk of bad debt.

If you would like advice on how to improve your credit control and debt collection, please contact us.