Polish micro-companies distrustful about debt collection

Debt

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The smallest companies in Poland approach debt collection with a distance and have problems with recovering payments for their work, writes the Warsaw Business Journal.

Compared to enterprises employing more than 10 employees, micro-enterprises more often conduct debt collection on their own.

The vast majority, 78% of them, in the last two years, used the services of professional companies compared to less than 5% of its debtors, according to a study by Kaczmarski Inkasso. The total debt of Polish companies recorded in the National Debt Register (KRD) currently amounts to PLN 11.5 billion (appr. EUR 2.53 billion). The largest part of this sum, almost 63%, is liabilities to the financial sector (banks, debt collection, leasing, factoring, and insurance companies). It is over PLN 7.3 billion. On average, one indebted company has nearly PLN 24,000 (EUR 5,271) debt.

Refraining from claiming their money from the smallest companies is often associated with the fear of losing a contractor and ignorance about the opportunities offered by the market. Although the vast majority of enterprises have already found out that professional debt collection is an effective way to recover their money and maintain financial liquidity, many of the smallest entities still approach it with suspicion.

Over three-quarters of micro-enterprises, i.e. those employing less than 10 employees, submitted unpaid invoices for collection to less than 5% of their debtors in the last 24 months. Every 6th decided to do so in the range from 6-10% of unreliable contractors. Only 6% collects more than every 10th non-paying business partner.

"The larger the company, the greater the awareness that the use of debt collection does not weaken the company's image or contacts with contractors. On the contrary, ordering the recovery of receivables from professionals is a clear signal to the environment that the company cares about finances and will not endanger its business due to unreliable contractors. It also makes it more credible. According to our research, such an opinion is confirmed by as many as three-quarters of representatives of the largest and medium-sized enterprises in the SME sector. This assessment is also shared by micro and small enterprises," Jakub Kostecki, president of the Management Board of the Kaczmarski Inkasso, said. 

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