Close Invoice Finance survey reveals smaller businesses better at debt management

Close Invoice Finance survey reveals smaller businesses better at debt management
May 20 2009 by Sion Barry, Western Mail

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SMALLER businesses are far more effective at managing risk, according to findings released today by Close Invoice Finance.

As part of its regular Small Business Finance Barometer, Close Invoice Finance put a series of questions on risk management to more than 500 SME owners. The survey found that three in five smaller SMEs (with between one and 50 employees) have less than 10% of debt on their books for longer than 60 days (termed “ageing debt”).

In comparison, two in five larger SMEs (with between 100 and 249 employees) have this low level of ageing debt. The majority of larger SMEs admitted ageing debt contributes between 11% and 50% of their debt book.

Close Invoice Finance chief executive David Thomson said: “This study proves that smaller SMEs have been more successful than their larger cousins at successfully managing exposure to the risk of bad debt. In such poor market conditions, it is imperative that factors such as cash flow supervision are managed closely.

“Cash flow management tools can give companies peace of mind and protect against the impact of late payment and even bad debt.