Late payments – time to act!
There was some welcome news for small businesses during the Chancellor's spring statement earlier this month. Philip Hammond promised to launch a 'call for evidence' to see how the government can 'eliminate the continuing scourge of late payments.'
Cracking down on late payments for goods and services is certainly a key issue for companies everywhere, but for the small business community it's a particularly pressing concern.
Across all industries, the Federation of Small Businesses (FSB) estimates late payments cause the closure of 50,000 firms a year, costing the UK economy around £2.5bn.
By gathering evidence, the government is taking a much-needed step on the path to new legislation which should, in time, better regulate the current situation.
How late is late?
Most SMEs specify a 30-day payment term, however the FSB has discovered that of those with 30-day terms, 66% have been paid late over a 12-month period. When surveyed, 11% of those were waiting for payments of more than £35,000, creating a devastating impact that can lead to a firm's collapse.
The average delay over the specified term is calculated at 22.5 days, but payment can be withheld for many more weeks and months, with catastrophic results.
How we can help
Business is all about building relationships. When you establish a good working relationship with a client or customer, chasing an overdue payment can feel daunting.
Outsourcing credit control to a bookkeeping company removes any awkwardness, offering a professional solution that delivers results and saves valuable time.
Here at AMR, our firm, friendly and courteous credit control service has proved effective for numerous clients across Kent and beyond. We can advise you of the right approach for each debtor. In the event a third party needs to be instructed to recover the debt, we can arrange this on your behalf.
We also offer a consultancy service and can arrange a credit management health check, enabling your company to establish an effective process if you have the resources to deal with credit control in-house.
As well as credit control, our services include payroll, bookkeeping, and pension auto enrolment. Please don't hesitate to contact us
to arrange an informal, no-obligation meeting. We look forward to hearing from you.