SMEs owed £33.6BN. How can they collect what’s due to them?
Statistics from Debt Collection Agency (DCA) STA Graydon show that B2B collection success erodes as the debt gets older.
In the last 12 months, they’ve compared their collection success on B2B invoices aged 60-120 and 121+ days respectively. The older invoices performed 46% less well than the younger invoices. Unresolved disputes and insolvencies were the main reasons for the much poorer recovery rate.
Managing Director Colin Thomas explains: “Few credit professionals would argue with the logic of our findings. So why do they hang on to their invoices for so long? All too often, they are instructed to use a DCA as a last resort so they’re forced to continue with their own collection efforts.”
STA Graydon’s findings come as BACS statistics show SMEs are owed £33.6BN, 10% more than a year ago. Thomas is unsurprised by the rise: “Our statistics prove that holding on to unpaid invoices too long is a recipe for disaster. And in every respect, it’s a false economy. For example: For every £100,000 worth of debt in the 60-120 day bucket where £70,000 is collected; 46% less or £37,800, is collected in the 121+ day bucket. That’s £32,200 more money returned to those clients placing younger debts.”
Read more at www.stagraydon.com