New data captured has shown that 48% of Businesses have seen an increase in late payment. Clear evidence that the pandemic is fuelling a continual problem that blights trade.
The New data supplied from cloud-based credit management platform, Know-it highlights that late payments remain an ever-present challenge for business owners. Late payments damage cash flow, restrict growth and can even present insolvency risks.
For many UK Businesses, survival through the remainder of the pandemic is reliant on cash flow. Late payment is the silent assassin of thousands of SMEs in the UK every year.
It is a reoccuring theme that many Small Businesses fail to take action against non payment for fear of losing the customer. Such short term thinking can be very damaging to the very existence of SMEs warn experts.
Know-its customers data has revealed 59% of Companies are receiving more excuses for non payment of invoices. Participants polled also revealed over 55% of the businesses would do business again with a late-paying customer.
According to Lynne Darcey-Quigley CEO and Found of Know-it, Companies are forced to continually engage with late payers. Until the Covid-19 pandemic is over and the economy returns to normal, it is likely to continue.
“Unfortunately, the data highlights an ever-present challenge when it comes to late payments. SMEs for example, are the most vulnerable and impacted from the crisis, and have been subject to delayed or frozen payments from policymakers and big corporations who saw it not a priority for their operations.”
“Despite the government outlining a route out of lockdown, many organisations on the receiving end of late payments will struggle to survive after the crisis. As we have seen from the data, businesses are left with little choice but to carry on and work with businesses deemed bad payers, often to their own detriment. To avoid organisations continuing in this vicious cycle it’s imperative business leaders are made aware of the tools and resources available to them, which can improve cash flow.”
Highlighting the role technology can play in addressing late payments Ms Darcey-Quigley said “We believe there is an opening for technology to help SMEs streamline their credit control processes so they can credit check and monitor, chase for payment and collect overdue unpaid invoices, all from one place.”
“By using technology to automate the credit control process, small business owners, who do not necessarily have the resources available to continuously check-it, chase-it and collect-it, can remove the headache of manual processing, saving time, reducing debtor days and increasing cash flow. Doing so, will free up a huge amount of time and resources for business owners to focus on other mission critical operations.”
“Although much of the onus will also be on larger companies to improve their payment practices, there is room for technology to make a huge difference for SMEs and ensure payments are made on time.”
Tackling Business late payment is nothing new. Dealing with late payment excuses is second nature to many businesses with vast experience of dealing with such. Many SME’s are turning to Small Business Debt Collection Experts to try to combat the problem.
Chasing unpaid invoices is a timely and stressful chore for business owners.