A third of SMEs have lost over £10,000 from failed customers

news release


A third of SMEs have lost over £10,000 from failed customers

Lack of credit checking is putting small firms at risk

Nottingham, 24 September 2013 – According to new findings published today by Experian®, the global information services company, three-quarters of small and medium sized enterprises (SMEs) have lost money as a result of a customer becoming insolvent.

Experian surveyed 600 SMEs to better understand the impact of customer insolvencies in the supply chain and found that in the last five years, 76 per cent of SMEs have lost money as a result of customers failing.  Nearly a fifth (19 per cent) of these businesses each lost between £5,000 - £10,000, while a staggering 35 per cent lost over £10,000 over five years.

When asked how often credit checks were carried out:

  • 68 per cent of SME owners said that they did check their customers’ and suppliers’ credit ratings at least once a year
  • 24 per cent admitted that they only credit checked new customers and didn’t carry out on-going checks
  • 38 per cent had been running a business for over two years but had only just started carrying out regular checks
  • 34 per cent of business owners only started monitoring suppliers after they had already lost money.

Ade Potts, Managing Director, Experian’s SME business, UK&I, said: “Although over half of SME owners said that they did check their customers’ and suppliers’ credit ratings once a year, this is not often enough to identify potential problems. Waiting until you’ve lost money to do credit checks is a bit like shutting the stable door after the horse has bolted.  Unless businesses check the credit status of their customers at least once every six months, they risk exposing themselves to further loss.

 “The rate of deterioration is far quicker for companies in today’s climate, so the sooner you can spot the signs of financial stress, the sooner you can react. On-going monitoring, addressing financial issues such as late payment of invoices head-on and not relying on one big customer or supplier will help lessen the risk of further losses as a result of insolvencies.”


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Natalie Fox
PR Manager
T: 44 (0) 115 992 2645 | M: 44 (0) 7971 709274

Managing credit in today's economy can be a real challenge for SMEs. That’s why Experian created Business Express - an advanced new web portal that helps protect businesses from financial risk with easy-to-use online products that help businesses improve cash flow and reduce the risk of bad debt.

About Experian
Experian is the leading global information services company, providing data and analytical tools to clients around the world. The Group helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2013 was US$4.7 billion. Experian employs approximately 17,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.

For more information, visit http://www.experianplc.com.