The latest survey of credit management professionals, from leading business information provider, Equifax, and the Institute of Credit Management (ICM), reveals that late payments continue to be the big challenge for many businesses.
Of the more than 450 members of the ICM who responded to the survey, 69 per cent said their company has been affected by late payments, with 59 per cent reporting an increase in late payments this year. The survey also showed that for over a third (35 per cent), they are chasing late payments up to three days sooner than they were a year ago. A further 29 per cent are chasing them more than four days sooner than they were a year ago.
Equifax Commercial Information Solutions said: 'With many hit hard during the economic downturn, it is no surprise to see that 77 per cent of those asked said they believe there should be more Government support to protect small businesses from the negative impact of late payments.'
The other key finding of the survey was the impact of the downturn on credit management jobs. Around two thirds of respondents confirmed that their company had made redundancies to their business overall in the last 12 months. However, 72 per cent said that these cuts had not affected the credit management/credit control functions.
'With late payments presenting a major challenge for businesses and Equifax's Corporate Partnership with the ICM, we decided to look at the use of credit and business data since the downturn' said Nic Beishon, Head of Equifax Commercial Information Solutions. 'Over a third (37 per cent) said they use credit and business data to check new customers and suppliers, whilst 41 per cent use it for ongoing monitoring. And unsurprisingly, more than half of the companies we surveyed have increased the volume of data used, as they aim to keep a close eye on customers and suppliers, in order to reduce the risk of bad debt.'
Philip King, Chief Executive of the ICM, said the survey showed that more needs to be done to change the payment culture within the UK: 'At a time when money is tight and cashflow critical, it is imperative that businesses address the late payment culture in the UK. Initiatives like the Prompt Payment Code go some way to remedy this, however it can only be beneficial when it is a part of everyday business practice.'