During the pandemic, small and medium-sized businesses (SMEs) were negatively impacted by numerous factors.
Government statistics reveal that over 400,000 SMEs have even shut down during this time.
Were late payments the biggest obstacle during the pandemic?
Recent research from the Federation of Small Businesses (FSB) has exposed late payments from clients as a threat to the survival of SMEs.
According to the FSB survey, 30 per cent of SMEs have experienced an increase in the number of invoices paid late within the last three months.
An additional eight per cent (of the 1,200 business owners surveyed) feared this could threaten their business.
Furthermore, over half of the SMEs in the sample reported a pessimistic outlook on the upcoming months, indicating a decline in business confidence.
Considering the increased cost of living, many businesses are incurring increased costs too. As a result, the British Chambers of Commerce (BCC) found that three in five businesses expect to increase prices in the next three months.
Getting clients to pay on time is an essential aspect of business cash flow and avoiding falling behind in their payments.
To minimise late payments, there are a few steps that could be taken:
- Be organised by maintaining written records of invoices and payments due
- Communicate a clear deadline for payments to clients
- Have a system in place to flag missed payments
- Initially agree on an interest rate for delayed payments with clients
- Make sure to follow up on any outstanding debts
For advice on related matters, please contact us for support.
