Businesses advised to use debtor insurance as late payments remain an issue

Late payments remain the main cause of cashflow problems for UK businesses, a recent Lloyds TSB survey has revealed. The bank’s biannual ‘Business in Britain’, which covers the first half of 2011, polled over 1,800 firms with turnovers ranging from less than £1 million to £100 million plus.

Of the 32% of firms nationally which revealed they were experiencing cashflow problems, the majority (63%) cited late payments as the main cause.

Pressure on companies’ overdraft facilities and fall in demand / lack of business were also key causes of cashflow concerns, comprising 37% and 38% of responses respectively. Regionally, the East Midlands and the East of England  are most affected by late payments, with 69% and 68% of businesses blaming late payments for cashflow problems.

Companies in the communications, transport and construction industries are most likely to be affected by late payments (86%, 72% and 70% respectively) and firms operating in the hospitality and leisure industry were least likely to cite late payments as a cause of cash flow problems (38%).

What are the Features & Benefits of Debtor Protection?
Typically, 90% of the value of a bad debt is insured, it can cover both overseas and domestic debt, it usually includes a credit monitoring service to evaluate your trade debtors to help you identify a potential credit risk before it becomes a bad debt and many come with an online claims handling process so make the cover easier to use if a bad debt arises.

For details on how Invoice Factoring, Invoice Discounting or perhaps other small business finance such as bridging loans can  avoid the impact of late payments, improve cash flow and perhaps fund growth or asset purchases simply get in touch or request a call back via the contact page of the site.

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