Potential For Business Failures Increases As Payments Due Approach £25 Billion Mark

Check That Company (www.checkthatcompany.co.uk, the online service that gives small businesses an easy and affordable way to run credit checks and company reports, is urging UK firms not to drop their guard against the potential for late payments and bad debts, following the publication of figures that showed the amount of money owed to British businesses have now reached almost £25 billion

Recent figures from Bacs, the payment services organisation, shows that the total amount of money owed to UK companies in June was 28 percent higher than it was six months ago and now stands at a staggering £24.6 billion in total now owed to businesses across Britain. The increase is apparently at odds with the other key finding from Bacs, which showed that the proportion of companies suffering from late payment problems has fallen by a fifth during the same period. Even so, a massive 769,000 companies were still impacted by late payments.

Contrary to the signals being sent by some organisations at present, Check That Company says that UK firms should be on increased alert for business failures over the next few months. “While there appears to have been a drop in the number of firms experiencing late payments problems, the very considerable rise in the amount owed to businesses is very worrying indeed”, says Dennis Scott, Director of Operations for Check That Company. There are some who will point to the fall in late payment issues as a positive sign, but we see the rise in the total debt as more of a concern, “Many businesses are clearly trying to clear or significantly reduce their outstanding payments and that’s probably what’s accounting for the fall in companies suffering from late payment. But the rise of almost a third in the amount owed during the same period is startling. It means that a smaller number of companies owe UK businesses much more money than they did at the start of the year. If this trend continues, we are bound to see more failures and bad debts and that will have a very severe impact indeed on small businesses especially.”

Scott says that there is a sense in the market right now that many businesses are hanging on giving long-term debtors who have been struggling during the downturn more time. “Whilst that attitude is generous and admirable, it can’t last forever. Every business gets to a point when they need to be paid and that’s fast approaching for many of these firms.”

Check That Company’s own figures show the levels of activity with regard to checking on a company’s ability to pay ebbing and flowing over the last six months, with increased levels of activity at times when there is more uncertainty over the economic outlook. “It’s quite clear that small businesses in particular are influenced by the general sentiment in the media and markets but it makes no sense to do anything other than take every precaution possible at all times against the potential for bad debt. UK businesses need to get into the habit of running credit checks on all new customers and making a regular check on any customer to whom they have or plan to extend significant amounts of credit.”

The Check That Company service makes it very easy for firms to check the credit status of any UK or Ireland company and to obtain registered details of company directors and filed documents. You can access the accounts of more than seven million companies, 9.3 million company directorships and over 400 million original document images, detailing financial reports and limited company details, through www.checkthatcompany.co.uk. Your first report, containing clear risk assessment indicators, costs just £1.99 with a second offered free for first-time users. You can perform basic company searches on the site without committing to buying any reports or images.

Businesses can register with the service simply by going to www.checkthatcompany.co.uk . The service operates on a pay-as-you-go model so it is very flexible and easy to manage and, after taking up the initial offer, registered users will pay as little as £2.49 for full company reports and just 99p each for document images.

For more information on Check That Company please contact:

Dennis Scott

Check That Company

Tel: 07860 567940

Email: info@checkthatcompany.co.uk

Web: www.checkthatcompany.co.uk