Firms clamping down on late payment culture

Businesses in Yorkshire are tightening up their cash and credit control procedures in a bid to prevent late payments damaging their cash flow, according to analysts at Yorkshire Bank.
By The Newsroom
Published 31st May 2012, 07:00 BST

Yorkshire Bank’s Invoice Finance team found that during the last 10 months, the average time businesses took to collect payments reduced from 52 to 49 days on combined sales of £6.7bn.

Owners are still concerned about the damaging impact late payments and bad debts would have on their businesses. A survey of more than 1,000 UK-wide companies by Yorkshire Bank found that around one in 10 business owners believe they would be forced to close, or seriously scale back operations, if their customers took more than 90 days to pay invoices. Richard Crossfield, regional invoice finance partner for Yorkshire Bank, based at Leeds Financial Solutions Centre (FSC), believes businesses have tightened their credit control procedures because of the growing pressure on cash.

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He said: “All businesses, particularly SMEs, depend on healthy cash flow to pay staff, buy stock and keep on top of their own invoices and bills. Poor cash flow management can be one of the most critical issues which businesses face but we believe UK companies have listened to the advice to tighten up their systems and controls.”

Related topics:YorkshireSMEs