73% of businesses questioned as part of Cattles Invoice Finance's annual business survey admitted that credit checking was not standard procedure when taking on new customers.
Combined with pressures on cashflow and rising levels of business fraud, this poses a substantial and avoidable risk to SMEs at a time when one large fulfilled but unpaid invoice could result in collapse.
Doug Crawford, group managing director at CIF, said: “These figures are concerning. It is never a good idea to take chances with new customers, but it is more important than ever when times are hard to ensure that you are trading with legitimate businesses.“SMEs should take every opportunity to minimise the risks they face in the current environment, including introducing a policy to credit check every new customer as standard. Legitimate, trustworthy clients will have no reason to question the procedure, and spotting potential problems before taking on new business could make the difference between survival and failure.”
Source: Cattles Invoice Finance www.ukba.co.uk
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