Accounts departments in the healthcare sector are spending twice as much time as their counterparts in the service sector chasing debts - proof that the fight for cash in some of the most hard-pressed sectors of society is now fully underway.
In a survey conducted by Debt Register, a new digital payment platform, 80% of firms surveyed in the healthcare sector, from drugs companies to care providers, were devoting 51% or more time on the phone or emailing to get money that was rightfully theirs to collect.
The most ‘efficient' appear to be those in the Services sector (accountants, consultancies etc) where 43% spent less than 50% of their time on overdues, and of those, almost a quarter (23%) spent anything between 0 - 25% chasing the cash.
Perhaps not surprisingly, businesses in the energy sector also appear less troubled; 60% spent less than 50% of their time on overdues. When all businesses were taken into account, almost a third (32%) spend up to three-quarters (between 51% - 75%) of their time chasing late payments and almost a quarter (24%) spent even more (76%+).
But while the figures show the extent of UK business' cashflow concerns, some commentators are worried that chasing the cash is taking accounts teams and business owners away from other tasks that are vital to business growth.
Businesses should be following up on invoices before they are due, and not when they are already late. There are several tools out there that can deal quickly with overdues and free the credit manager to steer their companies towards businesses that they should be trading with, and away from those who present a greater risk.
And it's not just me saying it. Philip King, former interim Small Business Commissioner and Industry Champion, agrees. He says: "Of course businesses need to keep the cash flowing, but if we are to grow our way out of recession they need also to be focused on the next sales opportunity, and not bogged down on tasks that can be easily automated."
The survey was undertaken in the context of new technologies and platforms now being available that can automate the overdue payment process, dramatically improving cashflow without tying up a team's time or having to resort to expensive (and often unproductive) legal action.
Debt Register is, first and foremost, a global payment accelerator that enables a credit manager to identify late invoices on their ledger and allow the platform to do the rest. Debt Register contacts the debtor automatically and in the appropriate language, requesting that the payment is settled, and ensuring the invoice is correct and not in dispute. In trials, the purpose-built digital platform can resolve debts anything up to 10 times faster than traditional legal action, and for a fraction of the cost.
By leveraging its relationships with leading credit reference agencies (CRAs) to report unpaid and overdue debts, debtors are encouraged to settle any overdues promptly to avoid their credit scores being negatively impacted. Debt Register is available globally and designed to suit any business regardless of industry.
For more information or to set up a free demonstration, please visit: Debt Register
