Businesses and organisations across the UK are urging the government to provide more support in their efforts to tackle the scourge of poor payment practices, after it was found that 24% of businesses believe late payment culture is a bigger issue now, than it was a year ago.
Nearly a quarter of SMEs have stated that late payments are a significant problem for their business, with large corporations taking a large proportion of the blame, particularly for businesses within the construction industry. And with more than one in ten businesses struggling to pay employees and suppliers due to late payments from customers, the growth of small businesses will be hindered, leading to significant impacts on the UK economy.
Before he was replaced by Sajid David as Chancellor of the Exchequer in July, Philip Hammond had called out late payment culture across British industries during urgent talks with business leaders at Downing Street. Industry bodies such as the Federation of Small Businesses (FSB) and the Confederation of British Industry (CBI), were in attendance during these pivotal talks, to discuss recent proposals to provide more power to the Small Business Commissioner with regards to fining late payers.
Speaking during the talks, Small Business Minister, Kelly Tolhurst, has said: “Shining a light on the unacceptable late payment culture in this way is vital to ensuring that all small businesses are given the support they need and get paid quickly – a key part of our modern Industrial Strategy.”
What can be done to tackle late payments?
The issue of late payments has plagued businesses within the UK for many years, and it doesn’t look as though it will be easily resolved any time soon. As a result of this, businesses must ensure that they take all necessary precautions to keep their risk of experiencing a late payment to a minimum.
There are number of factors that will work towards reducing a business’ risk, including:
- Credit checking your customers prior to the commencement of any contract
- Comprehensive T&Cs – outlining payment terms and any repercussion for failure to comply (i.e. late payment interest)
- Efficient invoicing (sent on time and ensuring accurate details)
- Effective credit control procedures (that remains customer focused)
- Escalate when necessary
When suffering from late payments or struggling to keep up with the credit control responsibilities, many businesses turn to the experts to keep on top of chasing for payment. Here at Zodeq, our 360 service offers clients an array of back-office support services, including outsourced credit control.
In outsourcing this function to our experts, you will gain a clearer picture of your sales ledger at all times, save time on payment chasing, improve cash flow and customer relationships and ultimately reduce your stress levels. Contact our team today to find out more about how we can support your business.