KashFlow Demands Government Intervention as Small Businesses Bombard Phone Lines with Bad Debt Fears
Tuesday, 4th November 2008 - For Immediate Release
KashFlow has warned small businesses to rigorously tighten up their credit control systems and demanded government intervention to allay UK bad debt fearsPress Room
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Chairman:
The Rt Hon Lord Young of Graffham
Founder & CEO:
Duane Jackson
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The announcement comes after the online accounting software provider fielded more than 55 phone calls in one week from customers with clients who have gone out of business owing them money.
For KashFlow Duane Jackson said,
“I’ve never know anything like it. We’re all aware of the economic down turn, but our small business customers are very concerned. And many are frankly scared.
“Our customer support team is helping where it can. In some cases it’s just a matter of reminding them about our software’s simple credit control features to tighten up their processes. In other cases, we need to explain how to record a bad debt in their accounts.
“Other businesses are caught up in the domino effect caused by seriously poor trading conditions too. And they need high level support. Many don’t see an end to all this.
“The Government was happy to intervene with the major financial institutions – but small businesses need action and support too.”
New research from KashFlow revealed that SMEs in the business services sector are spending an average of five hours every week chasing overdue invoices to maintain their cash flow. Late payment of monies owed - including the time and resources taken to chase late debtors – is a large contributory factor to the failure of many smaller businesses.
Around one third of SMEs experience late payment problems. At any one time, small businesses in the UK are collectively owed more than £11 billion - an average of £33,600 each. If the delay in payment is up to two months late, it is estimated that around 17 per cent – 56,270 businesses – will collapse.
In addition, 58 per cent of all SMEs believe that they could increase productivity if they didn’t have to chase invoices.
Duane adds,
“It’s not just about the cash. It’s about the extra time and effort it takes to chase up payment as creditors drag there heels on payment. And while they’re chasing cash owed they can’t work on the marketing and sales they need to help meet the challenge of the recession.”
With the credit in crunch in mind, KashFlow has published a free check list exclusively for small businesses available for free download from www.kashflow.co.uk/creditcrunchchecklist
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