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On 1 September 2016 Withy King LLP merged with Royds LLP. The trading name for the merged firm is Royds Withy King. All content produced prior to this date will remain in the name of the firms pre-merger.
1 in 3 SMEs reluctant to chase bad debt, survey finds
New research has revealed that one in three businesses is reluctant to chase bad debt.
The survey of 397 small and medium-sized enterprises (SMEs) also revealed that of those affected by bad debt, 81 per cent were reluctant to chase debtors because they found the process uncomfortable while 19 per cent were afraid of antagonising customers.
Only 15 per cent of SMEs surveyed used late payment regulations to charge customers extra for late payment.
Almost a quarter of the SMEs questioned thought the late payments position had deteriorated over the last two years, compared with 17 per cent that felt there had been an improvement.
Despite their unwillingness to pursue late payers, most small businesses recognised that taking action would deliver results. Almost a third (30 per cent) believed they could recover a greater amounts of the money owed if they were more proactive.
Yet three-quarters of firms (77 per cent) had no person or a procedure in place for chasing bad debt and a significant majority had no established escalation process for late payments.
While the research, produced by automated credit control service Satago, suggests businesses could reduce bad debts by being more proactive in their approach, there will be times when legal intervention is necessary to recover money owed.
Royds’ specialist team of dispute resolution lawyers for businesses understand that disputes can be stressful and time consuming and distract you from your main task of running your business effectively. We can advise companies on a range of matters, including debt recovery. For more information on our commercial litigation services, please visit or contact Stewart Wilkinson or Ashok Patel.
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