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Late payments hamper retailers
Small- and medium-sized retailers and wholesalers in the UK are being hampered by an increasingly high level of bad debt, according to Barclays Bank.
The Barclays Local Business annual Late Payments Report says that on any given day companies in the sector are owed £1.2bn due to customers failing to pay on time. It says £793m of
A typical business is owed £2,418, and has written off £1,552. "Despite some recent positive economic signs, it's concerning that late payments are on the rise. This is a serious issue for the companies we talked to - around a third say it threatens their day-to-day survival,” says Barclays Local Business marketing director John Davis.
Companies typically have to wait almost a fortnight (13.3 days) after the invoice due date before they get paid. "The businesses that will survive and thrive during the downturn are taking late payments seriously. We've seen a massive take-up of our in-house credit management service. Credit checking services are a powerful tool for deciding who to do business with, and who will pay on time. Last year we began providing the service free to all small businesses, not just our own customers, and we've been overwhelmed with its popularity. It's clear wholesalers and retailers alike are reacting to the downturn by keeping an even closer eye on their money," adds Davis.
More than half (56 per cent) of the companies in the sector think the late payments situation will get worse over the next year, and half have had to borrow money to improve cash flow.
Tagged as: Barclays Local Business | late payments report
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