According to new research conducted by Amicus Commercial Finance, small and medium sized businesses (SMEs) wrote off an average amount of £11,708 worth of debt last year.
The research found that 76% of SMEs wrote off debt during 2016, totalling almost £50 billion collectively, approximately £134 million each day. The research also found that one in five SMEs have been experiencing cash flow problems, with eight per cent using invoice finance and 19% planning to do so in the near future including 11% in the next 12 months.
500 businesses were involved in the study with medium sized firms employing between 50 and 249 people the worst affected by delayed payments, losing an average of £33,750 a year through unpaid debts.It is not clear if these bad debts are due to client insolvency or commercial decisions to forego debt seen as uncollectable.
Tom Rolfe, Co-owner of The Channel Partnership comments “The cost of insuring against bad debt is less than the average cost of bad debt to uninsured companies. We are currently creating a quotation for a company to insure their turnover next year for a premium of 25% of the value of bad debts incurred in 2016.”
For more information on Credit Insurance and the benefits it can have on your business, please contact The Channel Partnership on 01275 817320 to speak to one of our specialist advisors.