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A survey produced by Equifax and the Institute of Credit Management has revealed that late payments are still a huge problem for Small and Medium Enterprise. The survey shows that the number of companies using credit data in 2011 to reduce bad debts, has increased in comparison to 2010. The number of businesses who carry out business and credit checks for new suppliers and clients has risen to 86 percent, compared to 37 percent in 2010. Continuous monitoring is performed by 85 percent of companies, an increase on 2010 figures.

The increased credit monitoring and credit data checks have had a slight impact, with an increase in late payments occurring in 52 percent of cases. Last year, 59 percent of businesses reported an increase in the number of late payments. The number of companies who are chasing late payments much sooner has also increased, showing that companies are maintaining a close eye on suppliers and clients, both existing and new.

As businesses continue to struggle in the current economic climate, 65 percent of companies would like the government to offer a support system to help alleviate the problems caused to small businesses by late payments. The chief executive of the ICM, Philip King said:

“Late payments continue to put businesses under added strain, in an already fragile economy. The survey shows that businesses are struggling to tackle late payments and the majority would like government support, but it is also up to professional credit managers, and specifically members of the ICM, to take the lead in reducing the impact of bad debt and improving levels of best practice.”

About The Author

Gary Fields

Content Writer working alongside our expert accountants to bring you the latest Tax and Accounting news.

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