BPPG urges more small firms to join the trend in improving Credit Management Practices

The latest research from the Credit Management Research Centre (CMRC), member of the Better Payment Practice Group (BPPG), reveals that there has been a substantial improvement in the credit management practices of small businesses over the last six years. However, more small firms are urged to join this trend to keep cashflow healthy.

The survey of more than 1,300 businesses shows that 44% of small businesses had written credit policies in 2002. This is a dramatic increase from 1996, where the same survey revealed that only 26% had written credit policies. In addition, the survey reveals that 92% of the companies surveyed are aware of the late payment legislation.

However the research also highlights that small firms are extending more credit to customers than they are getting from suppliers. The small firms surveyed are averaging a minus 12 day net trade credit position, indicating a requirement for all small firms to tighten their credit management practices to ensure that their cashflow remains healthy.

Professor Nick Wilson, Director of the CMRC, and member of the BPPG commented: "We are seeing substantial improvements in the emphasis given by small firms to good credit management practices. In addition, the high level of awareness of the late payment legislation reveals how far firms understand the sanctions available to them. Good credit management practices and procedures are proven to reduce the incidence of late payment and it is more important than ever that this message is acted upon."

Companies wishing to overhaul their credit management practices can view the free advice and information contained from this website, www.payontime.co.uk. The site provides the tools and advice for companies to review their credit management practices, including: credit management guidance, letter templates and helpful step-by-step hints and tips on debt collection and other cashflow tools.

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