27/11/2008 - Slow payers hit British businesses
Customers who delay paying their bills are becoming an increasing problem for British businesses, according to new research.
Across the European Union as a whole, it takes an average 55.5 days for invoices to be paid, although UK customers rank slightly better at 51 days. The slowest payers are in Portugal, Spain and Italy, at 91 days, while the Scandinavian countries are the quickest at 30 days.
The issue of late payment of bills is not a new problem for many firms, but the situation is expected to deteriorate even further next year as the global downturn begins to bite.
Research by credit management company Intrum Justitia also found that the highest percentage of written-off debts is in industries such as construction and building, professional services, education and media. The firm's managing director, Owen James, said that businesses needed to take action to combat the problem of late payment.
"As the banks make credit lines more expensive and more difficult to obtain, it is vital for any businesses that they have effective credit management processes which, in turn, can have a significant positive impact on cash flow," he said. "Unpaid invoices due to poor credit management are one of the biggest contributors to business failure in the UK and this trend will continue unless businesses put more emphasis on this area."
Copyright © Press Association 2008
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