Are you a small business owner fed-up with yet another late-paying customer? Is the resulting havoc on your cashflow becoming too much to handle? Samantha North, from GoCardless, explores this common pain point in more detail, offering some expert tips to make sure your customers step-up and pay-up on time…
According to the State of Late Payment 2016 report from MarketInvoice, UK small businesses are owed an estimated half a trillion pounds in unpaid invoices. This astonishing figure signifies fundamental problems within the UK’s business culture, problems that disproportionately affect smaller firms.
On an individual basis, the average UK small business is owed £36,186 in unpaid invoices. This is according to data from Bacs, the system responsible for bank-tobank payments in the UK. The Bacs data also shows that 60% of SMEs have faced issues with chasing overdue payments. £36,186 is no small bean. Think what your business could do with that sum of money. It is not only the impact on cashflow that causes problems. You can fritter away a lot of time following-up with late-paying customers. Chasing payment is a process prone to awkward conversations and uncomfortable emails. This leads to uncertainty and stress.
When you consider what your team could achieve with that precious time, the impact of late payments looks even worse. What’s more, the resulting financial instability stops you from making nimble business decisions. You are always waiting to get paid. That How to beat the cashflow blues and get paid on time means fewer opportunities to spend time and money on growing your business.
Customers pay late for reasons ranging from pure forgetfulness, to their own cashflow issues. But no matter why, the end result is the same: you do not get paid on time.