23rd Sep 2016

Promoting culture change on late payments

Managing a healthy cash flow is crucial for any establishment.  Particularly for small and medium-sized businesses (SMBs).

SMBs are often hampered with a spate of unpaid invoices that seem to be curtailing their growth.

Unpaid invoices to British SMBs now total £67.4bn.  Up by 8% in the last year and 36% from £49.5bn in 2011. Totalling 14% of SMBs yearly turnover.

Inforgraphic showing late payments to SMBs in 2016

According to a survey conducted by Sage, more than half of British SMBs are owed at least £10,000 in late payments. With about 43% of business owners in the country also owed £20,000 in unpaid invoices.

The problem of late payments puts a heavy strain on SMBs in the UK. It’s becoming a huge obstacle for their growth and prosperity as it seriously restricts cash flow. Some small firms are at the brink of insolvency because of this.

All this is about to change with the introduction of The Enterprise Bill, which aims to tackle the issue. The appointment of a Small Business Commissioner will also provide some respite to small business owners. Enabling smaller firms to settle late payment disputes with larger organisations diplomatically via a free mediation service.

The bill; which is welcomed by The Federation of Small Businesses (FSB), also pledges to cut the cost of red tape by £10bn a year and control the powers given to independent regulators.

Once implemented, we should see a positive shift in payment culture, ensuring economic growth is supported throughout.

If you need to send or receive UK Bacs payments or manage Direct Debits, then look no further. Our UK Payment Solutions are designed with small, medium & large businesses in mind.  Meaning they’re quick, secure and simple to use.

If you’d like to discuss any payment-related issues your business may  be having, we’re available right now.