Small Businesses face up to backlog of Unpaid Invoices

0
1513
Small business invoices unpaid

A Commercial ‘Credit Crunch’ is predicted as the UK’s Small Business community are facing up to increasing Unpaid Invoices. Research by Business Funding Experts Iwoca has found that 40% of Small Businesses are facing Debts of over £10,000.

Small Businesses are going to face considerable disruption and cash flow issues over the coming months due to unpaid invoices. It is estimated that as many as one in four companies will now face going bust before the year 2020 ends.

The research published in the report “Levelling the paying field” looks at how payment terms were being managed prior and post Covid-19. It also sets our helpful policies and various recommendations for SME’s for the testing months ahead.

Many non-essential shops are planning to open next week and many will be looking to recoup unpaid invoices. Government grants and bank loans have fallen short of meeting operating costs during the pandemic for many SME’s.

The percentage of Small Business owners that owe large amount to their suppliers has nearly doubled over the past few months. Iwoca’s small business customers reported that their amounts owed to suppliers has risen since the coronavirus hit. 6.3% reported owing between £20,000 – £50,000. This figure is almost double the proportion from last year (3.7%). A further fifth of small businesses in this survey reported that they currently owe their suppliers between £1000- £4999 – up from 13.8% at the same point in 2019.

Christoph Rieche, Co-Founder and CEO of iwoca said “What’s emerging is a concerning game of ‘tug of war’ between small businesses as they look to survive and plan for the future. Buyers can’t pay their invoices because they don’t have the revenues and sellers are being asked to provide longer payment terms to ease the strain whilst already sitting on a growing backlog of unpaid invoices.”

Some Industry leaders have called upon Small Businesses to act quickly in respect of the Unpaid Invoices they are owed. Quick collection of unpaid invoices will help fuel the recovery of the economy. “Getting unpaid invoices paid” must be a priority for any Small Business.

Our tips on using a Debt Collection Agency to collect unpaid SME Invoices can be a valuable resource.

LEAVE A REPLY

This site uses Akismet to reduce spam. Learn how your comment data is processed.