One in four SMEs in East Anglia don’t know how much money they are owed, Bibby Financial Service survey shows

Sharon Wiltshire, managing director for Bibby Financial Services in East Anglia.

Sharon Wiltshire, managing director for Bibby Financial Services in East Anglia. - Credit: Archant

More than a quarter of East Anglia small and medium-sized enterprises (SMEs) are in the dark about how much money they are owed in unpaid invoices, research by funder Bibby Financial Services has indicated.

In total, 29% of SMEs were unable to say how much they have outstanding while of the businesses that did know nearly one in five (19%), said they were owed more than £20,000 and 7% were owed in excess of £500,000.

Sharon Wiltshire, managing director for Bibby Financial Services in East Anglia, believes the findings highlight ongoing difficulties small businesses face in managing credit control.

She 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.

“But many small businesses – particularly those with few or no employees – cannot effectively manage outstanding payments because they are focused on developing new business and fulfilling existing orders.”

Bibby says that the findings of the study - conducted among 1,000 UK SMEs during the third quarter of 2014 – represent a barrier to growth for thousands of small businesses throughout the country.

The issue is particularly acute in the hospitality sector, with two thirds (67%) unsure of the amounts owed to them. Meanwhile, almost four in 10 (39%) transport and distribution firms admit to being unclear about what was in their payment pipeline.

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Sharon Wiltshire added: “This represents a significant amount of money owed to East Anglia SMEs and the value of these outstanding invoices could be reinvested into businesses in the form of recruitment or technology.”

Bibby, a specialist provider of invoice finance, suggests that more businesses should consider forms of finance that help bridge the payment gap or consider outsourcing the collection of payments to specialist providers.