Bad Debts Costing Irish SMEs €1.7bn Annually

08 Jan 2018 | 11.52 am

Bad Debts Costing Irish SMEs €1.7bn Annually

Businesses annually writing off an average of €13,780 each

08 Jan 2018 | 11.52 am

SMEs in Ireland lose up to €1.7bn in revenue every year due to bad debts, according to a new report from Bibby Financial Services Ireland.

The firm’s Global Business Monitor produced the bad debt findings for Ireland. The report is compiled via an international survey of more than 1,200 SMEs across 11 countries, including Ireland.

According to its figures, SMEs in Ireland annually write off an average of €13,780 each due to customer non-payment or insolvency.

When asked which area is the most problematic in managing their business cash flow, over half (57%) of Irish SMEs cited collecting payment from customers on time. Almost one-third of SMEs (32%) suffered from bad debt over the past 12 months.

Internationally, German SMEs suffer the most from bad debt, with businesses writing off €44,000 per annum on average. SMEs in the Czech Republic write off the least, with an average of €6,200.

Mark O’Rourke (pictured), head of business with Bibby Financial Services Ireland, said that the tally for revenue lost through bad debt in Ireland was shocking.

“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,” he suggested.

“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.”

Bibby Financial Services Ireland is part of Bibby Financial Services Group, an independent financial services partner working in 13 countries. The Irish operation was established in 2006 and has a team of 30 employees based in Sandyford, Dublin.

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