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According to the latest Global Business Monitor, 57% of Irish SMEs said collecting payment from customers on time was the most problematic issue in managing their business cashflow.
The monitor also showed that 32% of SMEs suffered from bad debt over the past 12 months.
With almost 250,000 SMEs around the country, this equates to a total of €1.7 billion in revenue being lost by Irish businesses every single year.
The Global Business Monitor is an international survey of over 1,200 small and medium sized enterprises across 11 countries - Ireland, the UK, US, Canada, Hong Kong, Singapore, Czech Republic, Poland, France, Germany and the Netherlands.
German small and medium sized businesses suffer the most from bad debt with businesses writing off €44,000 a year on average.
But SMEs in the Czech Republic write off the least, with an average of €6,200.
"It's shocking that such a large amount is being lost by Irish businesses each year as a result of bad debt," commented Mark O'Rourke, Head of Business with Bibby Financial Services Ireland.
Mr O'Rourke said that SMEs need to take steps to ensure they do not fall foul to non-payment such as completing full background checks on all customers before extending credit, diversifying their customer base and ensuring strict payment protocols are enforced.
"Furthermore, business owners are often unaware of the broad range of funding options available to them as they wait for debtors to settle outstanding amounts - in many cases, alternative funding solutions are far more suited to their needs than traditional lending options," he added.