Tax & admin Fred Heritage · 1 August 2016
Small construction firms most impacted by bad debt?
bad debt? currently affects more than a quarter of the UK’s small businesses, according to latest statistics. Small firms in the transport and construction sectors are particularly affected, with 30 per cent and 29 per cent of owners respectively reporting bad debt over the last year. Small construction companies were forced to write off as much as 15, 000 on average. Non-payment of invoices by customers known as “bad debt” has resulted in 27 per cent of small companies across all sectors writing money off in the last 12 months, the results of the latest SME confidence tracker from small business financier Bibby have revealed. The quarterly tracker found that the average amount written off by businesses of all sizes because of customers failing to pay up for goods and services in the last 12 months was 11, 829. Global chief executive at Bibby Financial Services David Postings said: Bad debt is a chronic problem for smaller firms that can lead to staff cuts, delayed investment plans and at worst insolvency. ‘small business owners across the country must take steps to prevent late payment and non-payment from affecting them, particularly at a time of uncertainty when suppliers may look to squeeze payment terms for their benefit. Postings added that economic uncertainty following the Brexit vote, which may be felt especially acutely among small firms, gave owners all the more reason to attempt to clamp down on late paying clients.
ABOUT THE EXPERTFred Heritage
Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.