With the economy beginning to pick there is one barrier to growth that many business owners don’t see until it’s too late and that is lack of cash to fund future growth. Two recent surveys have highlighted the recurring problems UK businesses have when it comes to late payment.
The first survey from Close Brothers reveals that of those businesses experiencing problems due to late payments, 58% said that it impacts on their day-to-day cash flow management with 17% saying it has resulted in them reining in necessary spending. A further 15% say it threatens their ability to trade.
The impact of late payment is not just on poor cashflow but also in terms of the time taken out of the working day to chase up outstanding debts. Close Bros found that 17% of businesses spend more than 10 hours a month chasing late payers.
Despite chasing for payment it can often happen that the debt remains unpaid and findings from Satagom an automated credit control firm have revealed that 40%of firms have written debts off in the past.
As discussed in previous blogs part of the solution the late payment is to ensure there is a system and process in place for chasing bad debts. The Satago survey found that 77% of firms don’t have a person or a procedure in place so making the chasing of late payments even more difficult.
If your growth plans are held back by poor cashflow there are a number of solutions including invoice discounting, factoring, and spot finance which are detailed here – Cashflow Solutions.
Also here is a chat Rob Warlow had with Steve White of Thornbury Collections on steps you can take to avoid late payment.