County Court Judgements are on the rise in the UK as small businesses continue to be affected by late invoice payment.
New research suggests companies are increasingly turning to legal measures when chasing bad debt, with the volume of CCJs brought by small businesses increasing by 23% from the first half of last year to the second.
Analysis of 27,000 customers by tech start-up Ormsby Street, the company behind credit-checking tool, CreditHQ, revealed that the average value of a CCJ pursued by UK SMEs in 2015 was £4,619.
“Late invoice payment is fast becoming the scourge of small business in the UK, causing cash-flow issues that can impact growth and even the very existence of a business,” said Martin Campbell, managing director of Ormsby Street.
“Almost £5,000 is a significant amount for any small business to have to go to court to chase, and it is hugely unfair that a small business should have to spend its precious time and resource on chasing payment for work that has already been delivered.”
Campbell said that few small businesses have the time to spend chasing bad debt and taking companies to court.
“Credit-checking potential customers and partners is really straight forward and can save untold time, money and hassle in the future. Unfortunately, small businesses cannot rely on people paying their invoices on time and they need to protect themselves against this, by learning who is likely to be a good payer and who is not,” he said.