Chasing bad debts ‘too awkward’ for 1 in 3 SMEs
Debt collection agency Leicester
Photo Credit: anaxolotl via Compfight cc

 

Research shows that a third of SMEs are reluctant to chase for payment on bad debts owed to them – but why is this? A lack of suitable terms and conditions? Concrete reasons to expect to be unable to force payment?

 

 

According to credit control firm Satago, the answer in the vast majority of cases is simply that small-business owners feel too awkward to pursue the debtor for payment.

 

More than four fifths (81%) feel uncomfortable about chasing for payment; and 19%, nearly one in five, don’t want to antagonise their clients.

 

Over three quarters (77%) have no procedures or individuals in place for the organised pursuit of bad debt recovery, and “the vast majority” do not have escalation processes for late payments either.

 

Roughly a sixth (17%) of those surveyed by Satago said they believe the late payments problem has improved over the past two years.

 

However, 24% think it has worsened – a net balance of 7% of firms who have seen an increase in payment delays since 2012.

 

And despite the wide range of different methods employed by SMEs to chase payments – from emails and telephone calls, to escorting the debtor to their bank – only 15% have specifically enforced late payment regulations.

 

The findings show how unstructured internal credit control can be for SMEs, which may lack the experience of dealing with late-paying or non-paying customers, and are less likely to have an in-house credit controller dedicated to recovering funds.

 

Outsourcing can help to overcome this gap in expertise, by enlisting the assistance of a third-party debt recovery or credit control firm to apply the correct rules and regulations, as well as to use a professional, consistent and comprehensive approach when pursuing for payment.

 

Source:

https://www.satago.co.uk/pressrelease/3

Leave a Reply

Your email address will not be published. Required fields are marked *

REQUEST A FREE CALLBACK

Website Designed by Brookstone Creative Ltd.