Bibby Financial Services Ireland has launched a new campaign to help SMEs receive prompt payment from clients and customers.

The ‘Let’s Talk Bad Debt’ campaign provides business owners with practical tips and advice to protect their cashflow.

According to Bibby, the campaign also offers SMEs a range of resources and practical advice to manage customers in arrears, from offering alternative payment terms to more punitive measures such as adding interest or late payment charges.

Bibby’s team of financial experts will also provide insight into effective credit control systems as a key element reducing the risk of bad debt.

Recent research from Bibby Financial Services Ireland suggests over one-third of SMEs have suffered a bad debt over the past 12 months. Of those that have suffered from bad debt, over half have written off up to €10,000.

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To protect themselves from bad debt, Bibby is recommending that SMEs adopt some of the following practices:

• Know your customers – run credit checks on all new customers before offering credit terms and set appropriate credit limits;
• Set basic requirements – avoid taking on customers who fail to meet these;
• Use effective credit control – implement a structured approach to help reduce the likelihood of overdue payments;
• Have clear payment terms – make your payment terms clear and consistent from the start;
• Invoice quickly and accurately – avoid unnecessary delays by ensuring invoices are accurate and issued on time.

“Even businesses that are thriving can be just a few unpaid invoices away from suffering cashflow issues – particularly in the SME sector,” said Mark O’Rourke (pictured), managing director of Bibby Financial Services Ireland.

“But the earlier business owners take action, the more likely they are to prevent funding gaps or have to write off bad debt. Even simple actions such as implementing a structured approach to credit control and having clear payment terms can make a big difference, and our new campaign is designed to equip SMEs with the tools and knowledge they need to ensure continued success.”

Bibby’s funding portfolio includes invoice discounting, factoring, export finance, foreign exchange services and specialist funding for a range of sectors.