Rather than writing off bad debts, businesses should think of their overdue invoices as assets that can unlock vital cash at times of stress, says Azzurro Associates’ Andrew Birkwood
Amidst the economic crisis that the country is facing as a result of the coronavirus pandemic, unpaid invoices are one problem that has been largely overlooked.
This is not a new problem; most businesses fail because they run out of cash, often the result of poor credit management. But now, given the wider economic stresses, the issue of unpaid invoices threatens to get far worse, creating a cash squeeze up and down supply chains.
Larger companies that can afford to pay their suppliers are increasingly choosing to delay payment of invoices in order to help maintain their own cash buffer. Businesses that are not receiving payments are likely in turn to choose not to pay their suppliers either.
