Small businesses urged to credit check customers

The effect of late invoice payments on small businesses is getting so severe that companies are being encouraged to credit check new customers to make sure they have the ability to pay invoices on time.

A study of accounts filed by 25,000 firms showed that 24 per cent don't have sufficient money to pay their short-term debts, resulting in a chain of debt through small businesses, as one awaits payments from a business customer in order to pay its own outstanding invoices with its suppliers. The study by Baker Tilly also showed that a large proportion of small businesses were struggling with cash flow problems, with 1 in 39 companies requiring serious restructuring in the next 12 months if they are to avoid insolvency.

Among some of the tips given for small businesses, was improved invoicing and credit control. New customers should be credit checked to assess their ability to pay, and unpaid invoices should go into a debt recovery process as quickly as possible. Some companies handle customer debt chasing internally, while others employ a third party debt recovery service if the payment is not forthcoming within a reasonable time-frame.

If you run or own a business in Northern Ireland and would like to receive information about a solicitor debt recovery service, contact Wilson Nesbitt solicitors in Belfast for information on how the firm can help you recover some of your old client debts by calling 0800 840 9291.