late payment problems

A Small Business Guide to Credit Control

A Small Business Guide to Credit Control

As a small company with limited resources, a late-paying customer can represent a cashflow nightmare. You need to have stringent controls in place if you plan to extend credit to customers; if you have a lax credit policy, it could spell the end of your business as unpaid invoices reduce your ready cash to zero. This article explains how to develop a proper credit control policy for your business. We cover how to check a customer’s credit and how to decide how much to lend them, then move on to everyday systems for credit control. You will also learn how to chase up debtors and late payers successfully, and how to deal with the often tricky scenarios posed by dealing with larger companies. How do I check a customer’s credit? Before extending credit to a new customer, it is important to che... »

UK Small Businesses Owed £67bn Due to Late Payments

UK Small Businesses Owed £67bn Due to Late Payments

Britain’s small and medium businesses are owed a staggering £67.4bn in unpaid invoices, up by 8% from 2014’s £62.5bn figure and 34% from 2011’s £49.5bn, according to research by the Asset Based Finance Association (ABFA). Additional research from the group revealed that businesses’ wait times had also increased, with small and medium firms reporting an average wait time of 72 days – 11 days longer than in 2009 at the peak of the recession. According to the ABFA’s study, which featured 180,000 businesses, companies in the manufacturing and construction industries are the most affected by late paying customers with an estimated £13.4bn and £7bn owed to businesses in each corresponding sector. The report noted that while late payment problems continue to cause issues for small firms, more com... »

Small Businesses Leverage Cashflow to Fund Growth

Small Businesses Leverage Cashflow to Fund Growth

More than half (59%) of Britain’s small firms are using cashflow to fund growth as many believe it’s too “expensive and time-consuming” to seek funding traditional lenders; the national Working Capital Outlook Survey by C2FO has reported. 60% of small businesses said it was too expensive to borrow from banks and the report found that only 30% of UK companies are able to borrow money for an APR of under 6% – with firms in the financial and insurance sector borrowing at the highest rate of approximately 7.2%. The survey featured over 400 small and medium businesses and quizzed them on a range of financial issues, including how they preferred to improve working capital and deal with late payments. While many business owners said they were trying to finance development using operational cash, ... »

7 Ways Small Businesses Can Avoid Late Payments

7 Ways Small Businesses Can Avoid Late Payments

Running a small business demands juggling sales, customers service, managing staff, bookkeeping and 101 other jobs. Business owners work to their limits to run and grow their firm and the stress can be made much worse when you’re worrying about getting paid for it. Late paying customers has become a massive issue for small and medium business owners, with many owed billions in outstanding payments and being forced to borrow in order to keep cashflow going; whilst chasing late payments and managing the administrative burden also causes a huge strain on resources. So what can business owners do in order to avoid or at least reduce the impact that late payments may have on their business? Here are seven tips to help you keep your firm’s cash flowing: 1. Do your research: Seek busi... »

Late Payment Problems Worsen for UK’s Small Businesses

Late Payment Problems Worsen for UK’s Small Businesses

Bibby Financial Services’ ‘Small and Medium Enterprise Confidence Tracker’ has reported a 9% rise in late payments from Q2 2014 to Q2 2015, with 51% of business owners reporting they wait over 30 days to get paid. Small and medium businesses located in the West Midlands, Yorkshire and Humberside were the worst affected last year, however the number of firms suffering from late payments in the North East has also doubled. Construction businesses were the most affected in terms of sector, followed closely by manufacturing and wholesale firms. 55% of small and medium constructions businesses said they currently wait over 30 days for invoices to be paid – up 11% from Q2 2014. The news comes despite attempts by the government to tackle late payments. The new government introduced a Small Busine... »

Late Payment Remains “Headache” for a Third of Small Firms

Late Payment Remains “Headache” for a Third of Small Firms

A third of small businesses say late payment issues continue to be a barrier to success, with a fifth stating that the problems are getting worse, according to the latest Close Brothers Business Barometer (CBBB). The report, which is a quarterly survey by finance group Close Brothers Invoice Finance (CBIF), revealed that for companies who find late payment issues a major “headache”, 65% believe it results in cashflow problems and an additional 15% feel that it threatens their firm’s chances of survival. More than half of the companies struggling with late payment problems also stated that it has resulted in their business having to reduce their average annual turnover by up to 10%, with nearly a quarter confirming that they had to write off between 10% and 25% of their turnover in the last... »