Yorkshire SME’s less likely to turn down business compared to rest of UK, new research claims

More than half of SMEs in Yorkshire have never had to turn down work, which is significantly higher than other regions, according to new research.

The study, from Hitachi Capital Invoice Finance, shows how businesses in the area have never had to reject a contract (64%) or order (67%) because they couldn’t deliver it, which contrasts the 50% of businesses across the UK that do say no to paid work.

The main cause for the majority of businesses turning down work includes how the contract would not pay enough, or it was priced too cheaply (25%), a lack of management time and the customer known to be have a bad reputation (24%) or that they were offered unfair payment terms (23%).

Although the research shows that businesses in Yorkshire are less likely to turn down work, the region loses out on more money than they average when they do so, with 40% losing out between £30,001 and £100,000.

Of 501 business owners surveyed across the UK, 50% lost out on up to £10,000 in the past year due to rejecting contracts, with initial ‘startup’ businesses at the most risk, with 28% having lost between £20,001 and £30,000 by doing so.

As for the future, however, the majority of companies (60%) agree that they don’t think Brexit will impact on them rejecting more, or acquiring less work in the years ahead. An even higher percentage (66%) have not had to invest personal funds into their business in the past 12 months.

Andy Dodd, managing director at Hitachi Capital Invoice Finance, said: “SME’s are unfortunately having to decline contracts and orders due to unfair payment terms and unreasonable asks, not because they can’t deliver the work.

“Bad payers and unrealistic contractual terms can have a huge impact on any business, especially those that are relatively small or in startup.

“This is often part of a wider problem, not all business owners have the time and resource to chase up invoices or can risk working with an unreliable supplier.

“Our research from November last year found that 27% of SMEs are in ‘survival mode’ with investment plans on hold, highlighting how SME’s simply cannot afford to be turning down work, which more than half are currently doing.”

Andy added: “Our credit control services takes away the worry for the small business owner allowing them to focus on bringing in revenue by taking on new contracts. “They can also choose to release cash from their invoices allowing them to invest the money back in to the business. It’s important that SME’s are made aware of the solutions available to them, so they can take on new contracts and stop turning work down unnecessarily.”

The research also shows that retail and wholesale businesses appear to be the ‘healthiest’, as they are less likely to turn away work.

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