Getting invoices paid on time is vital to any business
Getting invoices paid on time is vital to any business. Not only do suppliers downstream need paying to keep the supplies coming to your business, but also staff and business overheads must be covered.
Nearly a quarter of UK businesses report that late payments are a threat to their survival. Tackling them represents a huge opportunity for economic growth, with research from the Federation of Small Businesses suggesting it could add £2.5 billion to the UK economy and keep an extra 50,000 businesses open each year.
There have been repeated calls to an end to the practice of late payment and the government started again in 2018 with a consultation on the issue.
There has been an announcement this week that a private members’ bill is being introduced this week, proposed by Lord Mendelsohn, aims to bring in fines for persistent late payers, shorten the deadline by which clients must pay suppliers from 60 to 30 days and force all companies with more than 250 staff to stick to the Prompt Payment Code.
As a business, there are some steps you can take to ensure you get payment:
- Make sure your terms and conditions are clear, robust, enforceable and are used on every transaction.
- Get invoices out on time.
- Check out new customer financial strength and payment history.
- If payments are late, chase them. You may ultimately be better off without a persistent late-paying customer, let them go and take your competitor down.
Remember, there is no such thing as “a business too large to fail” any longer
Our members report that in many instances unpaid invoices often exist where the company has not put all the steps in place or the steps is being missed by staff.
Late payments are one of the areas we frequently find is an issue talking with business owners and directors of small businesses. We have members who specialise in this area and will not only help to get those outstanding invoices paid, but also make sure that you have all the processes in place to reduce the percentage of overdue invoices
To find out more contact us either on 01223 597 845 or simply use our enquiry form