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• 23 Jul

  100K Average Sales Outstanding Are Not Being Chased Up.

  According to new research on behalf of Lloyds Bank Commercial Banking, London-based businesses are owed an average of £98,000 in outstanding customer invoices, and a third of UK businesses that were paid late in the last year, DID NOT chase up their outstanding payments.

  Of £100K Average Invoices Outstanding Most Are Not Chased 

  This research was reported by Business Money (10th July 2019), and it is unbelievable to think that London businesses could have nearly £100K on their unpaid sales ledger, but are not even chasing up the payments that are due.

  Reasons For Not Chasing - Time?

  The main reasons for not chasing were reported as fear of damaging the customer relationship (hardly worth preserving for customers that don't pay!), and not having the capacity or having time constraints that prohibit them from undertaking the chasing.

   Benefits Of Using A Credit Control Service

  In situations where you don't have the time to conduct the credit control yourself, there are a number of benefits to be had from using a credit control service. These can even outweigh any costs, in some cases.

  Firstly, the hassle factor is completely removed if someone else is doing all the invoice chasing for you. However, there are other benefits that you may not have considered. There is a huge cash flow and working capital benefit from getting that £100K of outstanding invoices chased and paid up. An outstanding invoice is worth nothing to your working capital position, but when paid your cash flow improves. Even if only half the outstandings were paid more promptly, that's still a £50K boost to your cash flow. Professional credit control can often achieve a faster debt turnaround than others may achieve. The quicker the debts are paid, again the more cash is available. If you are currently borrowing e.g. via an overdraft, that cash could reduce your borrowing.

  Optional Prepayments

  If you need to achieve an even bigger cash flow boost, you could consider the option of discounting the unpaid invoices, so that you get the majority of their value immediately, called a prepayment, from a discounting company, with the balance (less a fee) when the customer pays. This can be arranged for single invoices, or for all your outstanding sales invoices to maximise cash flow.

  By Glenn Blackman