If there is one thing that is going to hold back a business’ ability to grow its late payment.
Not being paid on time can be a barrier to growth and feedback I get from the Business Loan Services team is that this is a major bugbear amongst many of our clients.
But as the economy grows there are signs that payment settlement is showing signs of improvement.
A recent survey from Experian the credit reference agency showed that UK businesses paid their overdue bills on average one day faster between April 2014 and March 2015.
The national average of the number of days in which businesses pay beyond terms dropped by just under a whole day to 24.29 days
Perhaps not surprisingly, because they understand the pain late payment can cause, the smallest businesses were the quickest to tackle overdue invoices, as businesses with one or two employees settled bills 20.58 over agreed terms. This was an improvement of just over half a day.
Businesses with three to five employees showed the greatest improvement, paying bills 1.3 days faster at 21.34 days over agreed terms.
What about the UK’s largest business who typically have the finger pointed at them…. how have they performed?
Although those businesses, employing 501 people or more, took the longest to settle bills at 34.18 days over agreed terms in the year to March 2015, they did improved their payment performance by just under one day.
So well done to the big boys… but you still have work to do!
So if you do suffer from late payment what can you do?
Here are some tips from Experian:
Tip Number 1 – Check their status: Is the business you are dealing with real? Search them out on the web and see what you can find. Do they have a strong internet footprint?
Tip Number 2 Do a Credit Check: Carrying out a credit check will reveal their credit status, trading history and how they have paid in the past. All this will help you decide whether they are worthy of you giving them credit terms.
Tip Number 3 Remain Watchful: Nothing ever stays the same; the economy and individual businesses are constantly changing – a profitable business and a previously prompt payer can quickly turn into a business that is on its way down. The trick is to regularly run updated credit checks so you don’t get caught out.
Follow these tips and you will minimise the risk of being left with a long list of late payers.
Rob kindly agreed to attend the recent Pontypridd RFC sponsors networking evening and delivered what can only be described as an excellent talk on 5 Tactics to Boost Your Business and Your Profits. He kept the audience engaged throughout and the feedback from everyone was excellent. Rob is very knowledgeable on business and finance and on top of that is a genuine nice guy. We hope to have him back at a future event and I have no hesitation in recommending Rob’s services.
I wanted to thank you for such an insightful, energetic, and entertaining talk at the Kevin Green Wealth event on securing funding and creating a successful plan. It was brilliantly executed and a pleasure to listen to and the ideas I’ve learned are definitely going to help me in going forward.
Rob delivered a series of 3 workshops aimed at understanding how finance houses look at finance propositions with the aim for us as a team to deliver more of a bespoke offering to our customer base. The training was delivered to a mixture of staff who work with new businesses start-ups and existing established businesses across Mid & South West Wales. Rob delivered the training with an abundance of passion and has really helped my team look at financial propositions in a different light, many thanks again Rob and I look forward to work with you in the near future.
Hi Rob, it was so interesting and entertaining listening to you at the Kevin Green Wealth Coach Workshop in Reading this weekend! I didnt realise you can find Finance proposals such fun!. Brilliant tips! Thanks.
Further to your recent presentation at LEAD Wales just wanted to say it was very refreshing to see somebody talk passionately and positively about finance, very insightful!