The number of businesses in the North seeking legal advice on bad debt is soaring, a leading law firm said today.
Michael Neill, a partner who leads the litigation and insolvency teams at Belfast practice Cleaver Fulton Rankin, said he had seen a sharp rise in calls from worried owners of small and medium sized enterprises (SMEs) suffering significant delays in the payment of invoices.
The time spent chasing bad debt and the pressure delayed payment placed on cash flow was costing SMEs dearly, he said, and many had little idea what to do about it.
“As we move further into troubled economic waters, the problem of bad debt only rises higher up the agenda.
“Small companies in particular really struggle to survive when their suppliers are late in making payments. It is crucial that businesses facing such problems are aware of their rights,” said Mr Neill.
Mr Neill said prevention was better than cure and advised there were ways of minimising the risk of late payment.
“Don’t be afraid to carry out credit reference checks on customers, and see if they have a history of non-payment. Obtain references from third parties. If in doubt, try and persuade the customer to provide some money up front, or offer a discount for prompt payment,” he said.
PA