Nicole Strickland, International Trade Officer, highlights the difficulties of collecting overseas debt.
A recent suvery from MarketInvoice examined invoices sent to 93 countries. Its results showed that German companies were the worst late payers, taking an extra 28 days to settle invoices from agreed terms. French firms took a further 26 days and businesses in the USA 20 days. While UK companies (66%) often pay invoices late, those in the USA (71%) and continental Europe (73%) are even more likely to delay payment.
With Brexit fast approaching there is the potential that late payments will worsen for many small and medium-sized enterprises. In its report Concur comments: “The potential impact of Brexit is hugely uncertain as we enter a period with multiple scenarios. Whatever the economic impact, there is likely to be significant disruption for small businesses as every payment becomes more critical.”
Late payment does not have to be a fact of doing business today and small business owners should start taking practical action to reduce this burden on their firms.
The International Trade Team at Greater Manchester Chamber recommend taking the below steps to reduce the potential burden of late/non-payment from overseas payments.
- Credit Check your Overseas Customers – It is important to conduct financial checks on your customers before providing credit, it’s a simple step that could potentially save you hundreds and thousands of pounds. The Chamber can provide you with an in-depth financial report on any UK & overseas company in any market within five working days, so that you can be confident when offering credit terms to overseas customers.
- Use Export Credit Insurance – It's important to provide protection on your imports to ensure that if non-payment does happen you can claim insurance back. Greater Manchester Chamber has partnered with Bridge Insurance Brokers to bring its members Chamber ExportSure, an innovative and competitive export credit insurance product.
- Make it easy to pay. - Services such as BACS and Faster Payments should be used to remove any barriers to payments. Learn which payment methods your customers and business partners prefer, and ensure your business offers these to speed up your invoice settlement. – the Chamber offers training courses around methods of payment – the next course is on the 28th February - click here to book a place.
If you are interested in learning more about any of the services mentioned above, contact a member of the international trade team on email@example.com.