Mark O’Rourke, Head of Business, Bibby Financial Services
The average amount written off by every Irish SME is €13,780 due to customer non-payment or insolvency.
These figures were generated by the Global Business Monitor published by Bibby Financial Services Ireland; this is a survey taking in small-to-medium-sized enterprises across Ireland, the UK, the US, Canada, Hong Kong, Singapore, Czech Republic, Poland, France, Germany and the Netherlands.
Over half (57%) of Irish SMEs said collecting payment from customers on time was the most difficult part of managing business cash flow. Nearly a third (32%) suffered from bad debt over the past year and with a quarter of a million SMEs around Ireland this adds up to €1.7 billion being lost in revenue every year.
Mark O’Rourke, Head of Business with Bibby Financial Services Ireland, said: “It’s shocking that such a large amount is being lost by Irish businesses each year as a result of bad debt. SMEs need to take steps to ensure they don’t fall foul to non-payment such as completing full background checks on all customers before extending credit, diversifying their customer base and ensuring strict payment protocols are enforced.
“Furthermore, business owners are often unaware of the broad range of funding options available to them as they wait for debtors to settle outstanding amounts – in many cases, alternative funding solutions are far more suited to their needs than traditional lending options.”