A recent survey suggests that nearly 75% of small companies are now likely to accept late payment excuses from customers and clients, meaning that many could suffer from cash flow issues.
The findings, commissioned by online debt recovery firm Positive Collections, collected information from over 260 businesses across a number of industry sectors.
SMEs worried about losing customers
According to the survey:
- SMEs are most affected by late payers, with three-quarters of respondents saying they are likely to accept late payment excuses.
- 10% of don’t chase late payments at all because of fears it could jeopardise further business opportunities or simply don’t want to tackle the culprits.
- Very small businesses (firms of 1 to 9 employees) are the least affected by late payers, with 45% of those surveyed stating they always receive their payments time.
- Of the businesses surveyed, 17% would chase up debts but would stop short of taking legal action for fears it would cost too much.
As a result of the credit crisis, many small businesses – already unwilling to pressure late payers for fear of losing their custom – are being forced to accept long credit payment terms by larger suppliers.