SMEs “spend 3 weeks a year chasing payments”
Small and medium-sized enterprises spend an average of 130 hours a year, the equivalent of around three weeks, chasing payments, according to new research.
Analysis by Royal Bank of Scotland Invoice Finance shows that SMEs also wait an average of 30 days longer than their agreed terms before actually receiving their money, which can contribute to cash flow problems.
RBS Invoice Finance said it is “essential” to follow up on invoices promptly when a customer has failed to pay on time – and having regular contact between clients and the accounts department can make this process much easier and more effective.
Mark Qualter, director of strategy at RBS Invoice Finance, said, “‘This promises to be a long summer for SMEs chasing payments. However … by reducing the need to chase up payments, SMEs could free up to three extra weeks every year – time that can be spent concentrating on business development, marketing or improving customer relationships.
“Whether SMEs choose to use invoice finance or another approach to manage their cashflow, all businesses will need to take a structured approach to credit control and management. Given the current state of the economy, SMEs shouldn’t be afraid to seek out some assistance here, since a little help in this area can often go a very long way.”
By Andy Jowett
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