Research by Bibby Financial Services has found that business owners in Yorkshire and Humberside are in the dark when it comes to money owed to their businesses. Almost a quarter of SMEs in the region have lost track of what’s owed to them in outstanding invoices.
At a time when cashflow is king for business, we found that 23% of SME owners in this region had failed to keep effective track of what money was owed. Of those that did know how much they were owed, one in five business owners said they were owed more than £20,000.
Owed in excess of £100,000
We found that 11% of owners were owed more than £50,000 and that nine per cent were owed £100,000 or more These are significant sums for businesses of any size to have outstanding.
Credit control is vital to businesses, and our survey in 2014 highlighted the importance of keeping a firm grip on business finances. Being able to effectively chase invoice payment is the key to keeping on top of cashflow and managing your businesses’ bottom line.
Study of money owed
The study was conducted among 1,000 UK SMEs in Q3 2014, and it wasn’t just Yorkshire and Humberside where we found business owners in the dark. In total, 36 per cent of SMEs were unable to say how much they had outstanding.
Our study highlighted that many small business owners focus on developing new business and fulfilling existing orders rather than chase money outstanding. This means that many SMEs are struggling to fund growth with so much money outstanding, this is particularly true of smaller businesses with fewer employees.
With small and medium size businesses being the backbone of the UK economy, it’s worrying that many are struggling with cashflow and invoices outstanding. At Bibby Financial Services we’d call for owners to consider outsourcing debt collection needs and looking at specialist forms of financing such as our own invoice finance product.
Invoice finance can be a useful tool for business owners as it provides vital capital which allows businesses to operate more effectively. Funders can also assist with invoice payment, sales ledger management and credit control.
BIBBY FINANCIAL SERVICES
As the UK’s leading independent invoice finance specialist and a trusted provider of cashflow funding to over 7,000 businesses, Bibby Financial Services provides a range of finance solutions for companies in over 300 industry sectors.
For more information about Bibby Financial Services’ cashflow solutions, visit: www.bibbyfinancialservices.com or call 0800 91 95 92.