UK small businesses are increasingly turning to legal measures to when chasing bad debt, with the volume of County Court Judgements brought by small businesses increasing by 23% from the first half of 2015 to the second.
The new analysis from fintech start-up Ormsby Street, the company behind free credit-checking tool, CreditHQ, involved the analysis of data from its 27,000-strong customer base to further reveal that the average value of a CCJ pursued by UK SMEs in 2015, was £4,619.
“Late invoice payment is fast becoming the scourge of small business in the UK, causing cash-flow issues that can impact growth and even the very existence of a business,” said Martin Campbell, managing director, Ormsby Street. “Almost £5,000 is a significant amount for any small business to have to go to court to chase, and it is hugely unfair that a small business should have to spend its precious time and resource on chasing payment for work that has already been delivered.”
“Few small businesses have the time to spend chasing bad debt and taking companies to court, and nor should they have to,” continued Martin Campbell. “Credit-checking potential customers and partners is really straight forward and can save untold time, money and hassle in the future. Unfortunately, small businesses cannot rely on people paying their invoices on time and they need to protect themselves against this, by learning who is likely to be a good payer and who is not.”