In the style of The Muppets Christmas Carol, put yourself into Scrooge’s shoes and take a walk into the future to see what could happen if your existing payments solution was to go down, showing why it’s always a good idea to have a contingency plan in your back pocket.
What happens when you can’t pay Suppliers?
- Relationships with suppliers worsen with breakdown in communication.
- Supply of goods and services required to effectively run your business stops.
- You are unable to run your business to its full potential, resulting in the loss of custom.
- Suppliers may chase you through debt recovery services, with interest rates causing the original payment amount to spiral.
What happens when you can’t pay Employees?
- Unhappy employees mean unhappy customers, which results in loss of customers and ultimately profit.
- To stop morale from declining, you may be forced into making payments through CHAPS – potentially costing the business up to £25.00 per employee.
- Some employees may choose to cease working, resulting in business closure – or the need to hire temporary contract staff.
What happens when Customers can’t pay you?
- A drop in cash flow may result in the company having to source temporary funding.
- Customers may be unable to use your products / services if payment hasn’t been made.
- Also short-term customer service issues and long-term reputational damage, which could as a consequence reduce retention rates – it could even result in a disgruntled sales team!
What happens when you can’t pay other Business Payments?
- Employees could temporarily be left out of pocket if expenses are not paid on time.
- If you miss a final deadline for late payment of government taxes, you could face severe penalties and subsequent interest charges.
- Consequently, delays in dividend payments could discourage shareholders, which could ensue a stock selling exodus!
Just remember these are conceivable and likely scenarios. So you can make alternative arrangements to make payments, or do what other UK businesses have started to do. Weighed up their options and included a payments solution in their contingency plan.