The culture of late payment to UK SMEs is a regular topic in our weekly Business Finance Bulletin and the reason for this is that delayed payment hurts many businesses by undermining their growth and the value they bring to the UK economy.

A new survey from business finance company MarketInvoice reveals that 62% of invoices issued by UK SMEs in 2017 (worth over £21b) were paid late, up from 60% in 2016.

The survey found that the average value of these invoices was £51,826. A third of invoices paid late took longer than two weeks from the agreed date to settle – some of which took almost 6 months to be paid.
Sectors

Sectors that frequently pay late included the food & beverage industry (83%), energy businesses (80%) and wholesalers (79%). Meanwhile, those who took the longest to pay included transport businesses (25 days), utilities
(23 days) and those in media sector (21 days).

Regions

In terms of regional experiences, businesses in Northern Ireland were found to be the worst late payers with 93% of invoices paid late. East Anglia (68%) and East Midlands (66%) came in second and third respectively. Scotland was the best of the worst, where half (53%) of invoices were settled late.

Countries

The Marketinvoice research also examined invoices sent to 93 countries. German companies were the worst late payers, taking an extra 28 days to settle invoices from agreed terms. French firms took a further 26 days and businesses in the USA 20 days.

While UK companies (66%) often pay invoices late, those in the USA (71%) and continental Europe (73%) are even more likely to delay payment. However, the UK still takes twice as long (18 days) to pay UK suppliers than counterparts in Europe (9 days).

To lessen the impact of late payment Marketinvoice suggests,

– making T&C’s clear from the outset
– chasing payments
– and enforcing the right to claim compensation from late payments

The Duty to Report measures, which requires large businesses to report on invoice payments twice yearly, that came in to force earlier this year will help but how effective it will be remains to be seen.

If you are one of the estimated 20% of small businesses which have run in to cash flow problems due to late payments, then help may finally be at hand.

The government has finally launched the complaint handling service of the Small Business Commissioner to ensure fair payment practices for small businesses. This follows the appointment of Paul Uppal to the role of Small Business Commissioner in October 2017.

The Commissioner’s website has also gone live, providing guidance on payment issues including how to take action if a payment is overdue.

Margot James, Small Business Minister, says that £14 billion is owed to UK small businesses and estimates that taking action on late payment could potentially deliver a £2.5 billion annual boost to the economy.

The Small Business Commissioner’s website provides guidance on how to ‘check, chase, and choose’ in respect of dealing with unfair and late payments, that is:

– check if the right information has been provided to the right people in order for an invoice to be paid
– chase effectively when a payment is overdue
– choose how to take further action, including the option of submitting a complaint to the Small Business Commissioner

You can visit the Small Business Commissioner website here.

Despite confidence levels amongst many small businesses being muted, we open our latest Bulletin with a look at news from Hitachi Capital Business Finance that SMEs are seeing opportunities coming out of Brexit. Also, the latest Lloyds Bank research reveals that confidence is up in terms of production output across the regions. So not all bad news.

Dealing with late payment is bad enough but when late payment turns into no payment then that can be a bitter pill to swallow. That’s where trade credit insurance comes in and we have news of a new streamlined policy from Atradius designed for small businesses.

To close we take a look at the latest statistics from the Finance and Leasing Association which reveal that the industry continues to see strong growth in leasing and HP when it comes to purchases of plant and machinery and business equipment.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Stitcher or itunes channel.

After a long wait, the government has announced the appointment of the Small Business Commissioner. How will the new Commissioner, Paul Uppal, help small businesses, particularly when it comes to late payment?

Starling Bank, the mobile-only bank account provider, has announced the forthcoming launch of its mobile account service for businesses. They are looking for small business owners who are prepared to take part in the initial trial and help shape its look. Could that be you?

Carrying too much working capital can strangle growth. A new survey from Lloyds Bank has calculated how much cash businesses have tied up in surplus working capital. The amount, if released, could free businesses to fund their own growth plans.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Stitcher or itunes channel.

Late payment is a continual challenge for small businesses and a recent survey carried out by Zurich lays the blame at the door of the larger businesses. We share the findings of this latest research and what you can do to combat suffering from late payers.

With many people being uncertain about the current performance of the UK economy, one measure of confidence is the amount businesses are borrowing from the banks. I lift the lid on the latest Bank of England bank borrowing figures to see what businesses are up to.

To close this Bulletin, we share some recent experiences which highlight why you need to keep a close eye on your credit file. Lenders place a lot of emphasis on a clean report so it pays to keep your file in order.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Stitcher or itunes channel.

The British Business Bank, which was established to improve small business access to finance, has issued its latest Annual Report. In our latest Bulletin, we take a look at the progress the Bank has made over the last 12 months.

Alternative lenders are being increasingly quirky in how they tap into new markets to offer finance. We look at the news of a link-up between Funding Circle and takeaway app Just Eat which aims to boost takeaway owner’s access to finance.

The Federation of Small Businesses has always championed ways of tackling late payment and so it comes as no surprise that it has launched a service to help small businesses get paid on overdue invoices.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Stitcher or itunes channel.

With the government keen to boost exports, UK Export Finance has announced a new support initiative to help improve the flow of finance to exporters. To open the Bulletin, we look at how it will work and which other businesses will benefit.

Access to finance remains a hot topic. We share findings and suggestions from a new report, ‘Banking Small Businesses’, which it’s hoped will be picked up by government and banks to boost small business funding opportunities.

Whenever we feature the problems surrounding late payment, it’s rare that there is any good news. Whilst a recent survey undertaken by BACS, the payment service provider, has its fair share of gloomy statistics, there is at least one glimmer of hope in terms of reducing late payments.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Stitcher or itunes channel.

The government is keen to be seen to be playing its part in tackling late payment and we start this Bulletin with an announcement that a large number of government’s key suppliers have signed up to the Prompt Payment Code.

With banks increasingly reluctant to hand out overdrafts, how are businesses managing cashflow? It seems the gap is being filled by businesses increasingly turning to invoice discounting. We look at the latest figures which confirm the switch to this alternative source of finance.

Lenders seem to want to see mountain of paperwork when they are reviewing your finance request. One request is sight of your Tax Returns but want exactly do they want? To close this episode, we go through the three pieces of information lenders want to see.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Stitcher or itunes channel.

Despite the introduction of the Bank Referral Scheme, Nat West continues to develop its own panel of alternative finance partners via Capital Connections. In this Bulletin we look at the latest addition to the panel, equity crowdfunding platform, Seedrs.

As well as causing business finance distress, late payment can also cause personal stress for business owners. The extent of the problem is revealed in a recent survey carried out by The Prompt Payment Directory and we review the key findings.

Why would your bank say ‘no’ to a new loan when your business is profitable and your bank account operates with no problems? We close the Bulletin by sharing one reason why this would happen.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Stitcher or itunes channel.

With alternative finance becoming an increasing source of finance we kick off this Bulletin with news of the launch of The Association of Alternative Business Finance. Formed by seven players on the alternative business finance scene, the Association is focused on delivering higher standards in the industry.

Time is moving closer to government action on late payment. To lessen the prevalence of late payment I take a look at the forthcoming Duty to Report regulations which places an obligation on large businesses to disclose details of their payment practices.

Are there signs that business appetite to borrow money from banks is beginning to wane? We examine the latest bank lending figures released by the Bank of England.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Stitcher or itunes channel.