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Is Your Business Being Damaged by Late Payment?
 If
late payment is affecting your business,
then you are certainly in the majority
according to new research by UK Business
Forums. 32% of respondents to their poll
said that late payment was the most
frustrating problem they have to deal with.
Dan Martin, chairman of
UK Business Forums, said: “Despite achieving
much success, it is clear from our research
that the UK’s entrepreneurs face a host of
problems with running their small business.
“Getting payment on
time is particularly vital to small firms
operating on a tight budget and although
efforts have been made to tighten late
payment legislation, entrepreneurs are still
suffering.
“Research from the
Federation of Small Businesses* shows that
large companies are the main culprits when
it comes to late payment and typically take
up to 64 days to settle an invoice. With
small firms making up the majority of UK
businesses, they are the main victims. It’s
time the late payers paid up.”
Comments from survey
respondents:
“Late payment is
always a problem especially for someone just
starting out like myself. I get caught in a
Catch 22 situation - whilst they know there
is a bill lying overdue, they don't rush to
pay it assuming correctly that I am not
going to chase it for a while as I don't
want to risk annoying a potentially large
customer.”
“If I go into
virtually any retail premises, I have to pay
for the goods there and then, but when I do
work for a retail outfit, they want a 30 day
invoice! If I ask for payment on completion,
I get a bemused look. Why is it ok for them
to request immediate payment, but I can't?”
“I think that if I
push too hard one of two things might
happen. Firstly, I might lose future
business if I become a pain in the rear end
or secondly, it gives the impression that I
am struggling by chasing every pound.”
“If you can afford
to "lose" clients by being pushy, then I
think you should. Maybe go through your
client base and rate them as A - good B -
fair and C - awful. You'll probably find
that your A clients comprise about 20% of
your order book. Give them terms, say 30
days. B clients get 15 days and C clients
have to pay cash on delivery. You may lose a
bunch of your C clients - but do you really
want them?”
In other findings from
the research, which surveyed 100 UK-based
entrepreneurs, the ever present problem of
access to finance was the main difficulty
for 19% of small firm founders, while 14%
complained that dealing with red tape was
their main day-to-day struggle despite
recent efforts by the government to reduce
the burdens of regulation.
Remember though,
that there are steps you can take to prevent
late payment:
To see how credit checking your customers
could prevent late payment visit our Company
Report service here.
Invoice finance could take away the stress
of late payment and get you your money
quickly for very little cost.
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