| |
UK Business Debt News
The Cost of Bad Debt to UK
June 2007
According to the Credit Management Research Centre, UK firms are writing off tens of thousands
of pounds of debt due to customers not paying their bills.
There appears to be a worrying trend in large businesses where the average value of write offs has
increased to an astounding £88,000 per year.
With companies making an average of 5% net profit, that equates to a staggering £1.76 million in additional sales to
cover the shortfall.
It would seem that the write off culture does not only apply to large businesses. The CMRC also reported that
Small and Medium Enterprises were writing off on average £14,000 of bad debt per year. The shortfall would
require an additional £280,000 of sales at 5% to cancel the affect of the bad debts.
How many businesses are able to sustain this level of loss is not clear, but what is clear is that the
number of insolvencies in the UK continue to rise. It is worrying the number of businesses that fail to protect themselves from these alarming
factors and continue to write off large debts over the financial year without considering the implications.
If you are faced with a potential bad debt and are thinking about writing it off we strongly recommend you give us a call at Cred-X
first. We can use our knowledge and expertise to get you paid by even the most stubborn debtors.
It could make the difference between your business making a healthy profit or making a cash crippling loss.
Here at Cred-X we would much rather see you making a healthy profit.
Click on Debt Collections for more information.
|
|
