Overdue Invoices a Problem?

Collecting past-due balances is one of the less pleasing aspects of running a business. However, without chasing up overdue accounts, you could find your company running into real cash flow problems that could jeopardise the security and even the future of your business. SMEs are owed an average of £39,000 and 50% of all UK companies are feeling the pinch of the economic downturn. The longer overdue invoices go unpaid, the greater the impact they can have on your company.

The Cost of Unpaid Accounts

A study conducted by the Department for National Statistics revealed that, after around three months, 75% of all unpaid invoices are settled. However, if left for another three months that figure then drops to 56%. The longer you leave it, the less likely you are to get paid. The industry that has suffered the most is the retail and distribution industry, which is currently, owed a whopping £16.6million in unpaid accounts.

However, all this is set to change. The EU Late Payments Directive is to be introduced in 2013. It is designed to combat the late payment for goods and services within the European Union. The main amendment is the inclusion of a 30-day time-limit for payment as a legal statute. Once that limit has expired and should the debt still not have been settled, companies can instruct solicitors, lawyers or debt collection agencies to recover the outstanding balance – at further cost to the debtor. In short, after 30 days, the debtor will have to pay the outstanding sum, plus any costs incurred by the aggrieved party in retrieving that balance.

Recover your Debts Today

While this may be good news for the future, it may not be of help to businesses who are waiting on payment now. What many are unaware of is that there are currently free services available to businesses of all sizes that will put you in touch with the right DCAs. If you are feeling the squeeze, thanks to unpaid invoices, consider contacting a company like ComparetheDCA.com, who can help you get back what is rightfully yours.