Small firms suffer through chasing debts
Over a third of small firms in Northern Ireland are owed more than £20k in late payments, according to a new survey.
The latest quarterly Close Brothers Business Barometer said that half of the respondents facing problems said that late payments threaten day-to-day cash flow management and a further quarter said that they have had to limit necessary spending as a result.
The survey also revealed that a fifth of firms in Northern Ireland spend more than ten hours a month chasing unpaid bills.
Harry Parkinson, managing director of Close Brothers Commercial Finance, said that of the businesses facing problems due to unpaid invoices, 63% say that they are owed more than £20,000.
"This is constricting their cash flow and the knock-on effect is that it prevents them from being able to pay their suppliers on time, thus creating a vicious cycle," he said. "It's a situation that needs to be addressed, and alternative funding methods such as invoice and asset finance present a solution.
"Invoice finance works to bridge the gap between raising an invoice and receiving payment.
"We are actively working with local firms to raise awareness and ensure that they have access to the guidance and funding they need to manage their cash flow and make the most of the assets they have at their disposal."
Mr Parkinson said that additional time is being spent chasing up late payments.
"Time is often a manager's most precious asset so it is important to make the best use of it. Invoice finance can help mitigate the time spent chasing payments and month-end reconciliations.
"I encourage small businesses, particularly those who are suffering under the pressure of late payments, to reassess the funding they have in place to make sure it's appropriate to meet their needs."