Insider Media recently reported a staggering statistic that the average small business in the Midlands is owed more than £113,000 in outstanding invoices
Lloyds Bank Commercial Banking said that this figure was up by 8 percent since its last Business in Britain report in January 2016. One explanation for this could be the rise in inflation and the weakening of the pound which has lead these businesses to increase their price without little choice just to stay afloat. Likewise, the customers of these businesses could also be suffering under similar circumstances which means they may struggle to comply with payment terms.
It is vitally important for businesses to keep on top of their debts and seeking advice to manage cash flow. Much can be done within the businesses themselves in order to reduce debts owed to them. As a few examples, businesses could look at their contracts with customers and evaluate the payment terms or they could have a clear system for chasing debts at certain stages. The key is to tackle these debts early on.
It is important for businesses to seek specialist advice before they enter into financial difficulties so that measures can be put in place to help manage their cash flow and to avoid the possibility of going out of business.
If you require advice from one of our specialist solicitors, please do not hesitate to get in touch for a confidential discussion.