Thursday 6th November, 2014

According to research by Bibby Financial Services, the financial arm of the Bibby Line Group, more than a third of UK small and medium-sized businesses are in the dark about how much money they are owed in unpaid invoices. 

In total, 36 per cent of SMEs were unable to say how much they have outstanding. Of the businesses that did know, almost a third, said they were owed more than £20,000 and more than one in 10 were owed more than £50,000. Six per cent were owed in excess of £100,000. The study was conducted among 1,000 small and medium-sized enterprises in Q3.

David Postings, CEO of Bibby Financial Services believes the findings highlight ongoing difficulties small businesses face in managing credit control. He said: "Having a robust credit control process in place, and being able to chase invoice payment is the key to effective cashflow management which is critical for any business."

He added, "But many small businesses – particularly those with few employees – cannot effectively manage outstanding payments because they are focused on developing new business and fulfilling existing orders."

The unpaid invoices was particularly acute in the hospitality sector, with two thirds (67 per cent) unsure of the amounts owed to them. Meanwhile, almost four in ten (39 per cent) transport and distribution firms admit to being unclear about what was in their payment pipeline.