SMEs 'need to minimise risk of late payments'

News Article - 19 January 2011
Category: Business

Bosses of small and medium-sized enterprises (SMEs) are being urged to ensure that they reduce the level of risk they are exposed to under the current climate of economic uncertainty.

Online financial management service e-bcm suggests that small businesses need to reduce their level of exposure to late payments and take a firm stance on extending credit to customers.

According to a report by the company, small firms could face going under if they leave themselves at financial risk from late payments, as an increase in lending rates this year could devastate SMEs.

Dennis Scott, e-bcm commercial director, recommends that firms monitor their cashflow carefully, as increased lending rates could have a devastating effect on some smaller businesses this year.

"As the banks tighten their belts, smaller firms will find it harder to get paid," he stated. "To survive, they may then be forced to seek refinancing or to take out loans at crippling interest rates. Businesses that want to avoid running into problems need to reduce their own level exposure without delay."

SME accounting software can help small businesses in the UK to keep strict control of their finances and assess business performance. Up to half a million businesses folded in 2007 and closures have reached a 15-year record high.

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