For all businesses, but especially for small businesses, late payments are probably something which you have come to expect. This was probably not the case when you started your business, but unfortunately it is a sad fact that many customers just simply do not pay their invoices on time. In fact, most small businesses wait an average of two months to get paid, leading to a whopping £33.6bn collectively owed to UK SMEs.
These figures would be worrying at any time, but in the current economic climate, they are life-threatening to many small businesses across the country. This interruption in cash flow can leave them unable to pay their own debts, and ultimately lead to them going out of business.
It is therefore more important than ever to invest in credit insurance, which will protect businesses whose cash flow has been interrupted by late or non-payments. Credit insurance companies will step in when payment needs recovering, ensuring that you can carry on paying your own bills, seek out new business and advance, instead of falling into difficulties.
Of course, credit insurance shouldn’t take the place of sensible business practice. You should still make wise decisions over who to do business with and what your payment terms will be for each individual (and then stick to them!). Credit insurance companies can help you in this way too, providing credit checks on current and prospective customers, which can be vital in helping you to decide who is right for your business.