A shocking survey has revealed that 32% of businesses are spending up to 75% on late payment issues. Businesses are surprisingly spending more time chasing overdue debts when that time would be better used for more positive purposes.
The online survey conducted by Debt Register, found that almost a third of all businesses spend up to three-quarters of their time on overdue invoices. Shockingly almost a quarter spent even more time chasing late payments at 76%+.
The Healthcare sector was revealed as the sector that spent most time chasing debts. 80% of firms surveyed from pharmaceutical companies to care providers were devoting at least 51% of their time chasing unpaid debts.
Manufacturers were also struggling to get invoices paid: 44% spent more than 50% of their time chasing unpaid invoices.
The most ‘efficient’ appear to be those in the Services sector such as accountants, consultants, advisers etc In this sector 43% spent less than 50% of their time chasing unpaid business debt. Businesses in the energy sector also appear less troubled. A reduced percentage of 60% spent less than 50% of their time on overdue invoices.
In the Technology sector, exactly half spend half of their time or more on business debt collection. It was also a similar scenario in Banking and Finance as 48% spent more than half of their time chasing late payments.
Running a business is difficult enough in the modern world. Most Business owners do not start their companies with the intentions of ever needing to have to perform debt collection to get customers to pay.
Gary Brown, Founder of Debt Register, says the figures are unpleasant reading “In an ideal world, businesses would be following up on invoices before they are due, and not when they are already late,” he says.
Philip King, an Advisor to the company said “Of course the fundamental role of the credit manager is to keep the cash flowing, but that also means working with the wider business to define appropriate credit terms with customers and agreeing who is/isn’t a good risk. In these tough times, businesses will be trying to hang on to their cash for longer which is why it is even more important to have the right processes and the right tools in place to ensure a credit manager’s time is spent on the areas that require their particular skills.”
Leading Business Debt Collection Experts Federal Management commented “These figures are no surprise. There is a great deal of procrastination from many Businesses when it comes to tackling unpaid business invoices.”
“Businesses often don’t see the real cost of a Business customer not paying. As well as the principle sum, there is the time spent on chasing the customer. The cost of phone calls, letters, emails plus the wages of the person performing the task repeatedly day in day out”
“We have helped thousands of Businesses collect their debt and the one common statement we hear is that they wish they’d come to us sooner for assistance”
In the wake of the pandemic there has been a spike in unpaid business debts. Many Businesses are struggling in the aftermath and whilst the economy is improving, for some it could be too late.
The demand for Professional Commercial Debt Collection Agencies is increasing post covid with many Businesses turning to them for help. If you are a Business owner and wondering why you need a Debt Collection Agency, the simple answer is that has helped thousands of Companies reduce the cost of recovering their unpaid business debts.