Value of business debts chased through court system up 39%
The latest report from commercial debt recovery law firm, Lovetts, shows that businesses are getting tougher with their customers on outstanding debts. With the British Chambers of Commerce this week announcing that business confidence increased in the last quarter, Lovetts figures suggest businesses are taking a much more robust approach to outstanding debts, to help secure their long-term future.
Compared to Q1 2011, the value of debt claims Lovetts has pursued through the legal system on behalf of its active clients has increased by a huge 39.1%, year on year. This dramatic rise – alongside a 13.3% increase in the number of claims pursued – suggest businesses are putting the biggest focus on the biggest debts to keep cashflow moving.
Charles Wilson, CEO of Lovetts PLC comments, “Businesses have in the past been hesitant to chase up the largest unpaid bills too assertively. This is often because these debts are owed by the biggest and most influential of their clients and they were anxious not to rock the boat. However, whether it’s improved confidence or simply the fact that tolerance of late payment has run its course, it is encouraging to see that businesses are taking these debts more seriously and acting decisively to recover money owed – it could, after all, be a matter of business life and death.
“Not only does it make good business sense to get those high value bills paid as early as possible, but firmly chasing them up once they become overdue can also deter future late payments – particularly if Late Payment Interest and Compensation (where applicable) is added to the final amount owed. A customer who does not pay, or frequently pays late, is not a profitable one.
“As confidence in the UK economy grows, it will be interesting to see how this is reflected in debt recovery activities. To ensure future stability a robust approach to recovering debt must be sustained and the culture of late payment in the UK needs to be tackled by hitting late payers where it hurts – in their pockets.”
Read more at www.Lovetts.co.uk