The Credit Management Research Centre at Leeds University Business School has found that the average SME writes-off ?14,000 in bad debt each year. A third of all UK companies cite this bad debt as a direct reason for business failure. But why are there so many twists and turns in the roads to running a liquid business and what can be done to ensure a smoother ride?

One explanation for poor business credit control could be our traditional British reserve.

Of the thousand small businesses we've met in the last two years, over three quarters of them are facing an impending cashflow crisis. In the main, the crisis is due to the traditional British reserve and the fear of asking for money they're owed," says Andrew Radley, director of outsourced credit control company, Inksmoor Financial Services.

This is true, the British find it difficult to be direct, says Dr Brian Young, lecturer at Exeter University's School of Economic Psychology, money is a taboo subject, we tend to avoid talking about it as it might reveal too much about another great British obsession - class.

This English reserve is a throw-back to 18th century manners yet it's restricting 21st century cashflow, says Radley who has 20 years' experience of credit control. "There are various techniques that can be used to persuade customers to pay promptly."

He explains that "great cashflow is the life-blood of any business. This means tight credit control and that involves building relationships and persevering with clients to make them adhere to payment terms.

Firstly, I advise SMEs who are chasing for late payments to verify that the goods, services and invoices have been received and agreed. Once this has been established, its time to act proactively and professionally, attitudes must change from "would you mind" to "I'm calling to get what we're owed."

"The trick is to prepare and to act before the debt is over-due," says Radley.

"First off, ensure your contracts are in place - terms and conditions including payment.

"On each invoice, ensure you state clearly your payment terms.

"Its imperative to form strong relationships with your customer purchase ledger clerks. Start by discovering their name so you will always have a point of reference when you call. Open your conversation with a few light-hearted comments or questions to build trust and rapport. Then it's down to business.