SMEs can enhance their profits by as much as 15 per cent if they received timely payments from their large corporate customers.
A study has found that the small and medium enterprises (SMEs) can enhance their profits by as much as 15 per cent if they received timely payments from their large corporate customers.
A study by the leading financial services agency Crisil, carried out among 5,000 SMEs, estimates that timely payments from large customers will help SMEs reduce interest costs, and thus improve profitability by around 15 per cent, besides bringing about a positive impact on their long-term health and sustainability.
"SMEs need to understand the costs and impact of delayed receivables, and factor this into the selling price".
Further, industry associations and trade bodies need to increase awareness among SMEs about the provisions of, and the redressal mechanisms under the Micro, Small, and Medium Enterprises Development (MSMED) Act," Crisil Ratings director for SMEs Ramraj Pai said in a statement here.