The BIS’s Prompt Payment Code is found to be lagging… but there’s plenty businesses can do to help themselves.
New research published last month makes clear the scale of the UK's problem associated with late payment from suppliers, with calls for an independent inquiry.
Published by the Federation of Small Businesses, the top five reported reasons were: no excuse or justification given (49%); internal invoice processing issues causing a delay (35%); the customer extending the payment terms without your consent (34%); invoices lost or misplaced (33%); invoices “never received” (31%).
Commenting on the report John Allan, National Chairman, Federation of Small Businesses, said:
"If businesses do not get the money they are owed, they may not be able to pay their staff, invest in their business or pay their own suppliers. There is a knock-on effect right down the supply chain, which undermines the UK economy as a whole.
“Late and poor payment practices are holding back our economy and pushing potentially successful firms out of business."
With this in mind, Close Brothers Invoice Finance are launching The Modern Finance Economy next week to give you a programme of advice and information about what firms can do to flex their financial muscles.
Over the next three months we’ll explore the latest thinking behind financial planning and how this is helping firms to grow, manage their supply chains, and handle everything else affecting the amount of cash flowing through some of the most ambitious and successful businesses today.
Subscribe to our blog to find regular new insights into How modern Finance Directors think, Five ways to keep cash flowing and How cash availability can be the biggest factor in your first five years in business, to name just a few areas.
With expert opinion from top industry specialists and personal life stories from company owners, there promises to be plenty for you to take away and learn for your own future planning.
Late payment remains a serious issue for businesses, especially small businesses. According to recent data published by Bacs Payment Schemes, the direct debit company, small and medium businesses are owed a total of £32.4 billion, and small businesses are waiting for an average of £31,901 in overdue payments. This has a damaging knock-on effect on small businesses’ ability to manage their finances and plan for growth, and pushes late payment down the supply chain, potentially affecting many more firms.
Recognise this in your business? Stay with us over the coming weeks to find out how you can manage the situation.
