A recent survey, which more than 1,000 small businesses took part in, revealed that small businesses were struggling to ensure their invoices were paid on time.
The research, carried out by Crossflow Payments, revealed that 15% of all turnover received by small firms was paid late in 2016.
Scarily, almost 25% stating that they don’t normally have their invoices settled within the agreed time, and half of those suggesting that on average it is ten days or more beyond their payment terms.
Similar research was carried out by Zurich, in their SME Risk Index, partnered by YouGov. This survey involved 10,000 small businesses and concluded the same. 21% of the 10,000 surveyed were owed more than £25,000, and furthermore 9% were owed more than £100,000.
Ian Orgill, of CHW, said: “Many businesses look to achieve external funding to help their businesses, before considering their debtors book. Credit control can often be an unpleasant task and difficult for some business owners. Our team are impartial, therefore via our outsourcing department, can provide this service.
“Indeed, there are some pieces of cloud software that are available to business owners that automate the credit chasing process.”
These late payments are having a direct impact on not just the small business market, but the wider economy as well. When the small business owners were asked what they would spend this money on; 22% said they would increase their marketing and sales budget, in turn generating more sales, 17% said they would hire more staff and 17% would increase the wages of current employees.
If you’re looking for accountancy advice as a start-up company or are struggling to pay your invoices on time, check out our LaunCHWorks package for start-ups. You may also want to read our don’t miss the deadlines article which is a growing concern for those who file their tax returns late.
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30 September 2019
As with your personal credit rating, your business credit rating should be something you consider regularly. A poor credit rating could impact your ability to raise finance, the credit terms you’re offered, or even the suppliers that will deal with you.