In 2019 the balance of outstanding late payments almost doubled to £23.4bn*
The Federation of Small Businesses (FSB) has published its small business index for the fourth quarter of 2019. This found that ‘balancing the books’ was the most popular use of credit among small businesses. 23% of firms that used finance to update equipment followed, while smaller proportions used funds to expand their business (16%) or for recruitment (2%).
Efforts were made to encourage small businesses to apply for a greater range of financing options. The share which seeks to access loans and/or overdraft facilities has hit its highest point since the first quarter of 2016 at 88%
The findings follow previous research from the trade body that showed the UK late payment crisis leads to the closure of 50,000 small businesses a year at a cost of £2.5bn to the economy.
The latest figures from retail payments authority Pay.UK show that the balance of outstanding late payments almost doubled to £23.4bn in 2019.
Mike Cherry, national chairman of the FSB says:
“If this government wants to leave a lasting legacy amongst small businesses, it has to make ending the UK’s late payment crisis a top priority. It’s troubling that so many external finance applications are driven by cashflow concerns”
“This really shouldn’t be the case – you wouldn’t dream of doing your weekly shop and telling the cashier that you’ll pay for it in 100 days, but corporations take this approach to small businesses in droves.”
“We need to put that attitude to bed, for good.
“We fought hard for a package of late payment reforms under the last administration.
“Frustratingly, it was put on ice due to the General Election.
“We’ll be working closely with the new small business commissioner to resurrect it.”
To help eliminate this wide spread problem, credit control software such as Credit Hound from Draycir helps chase payments more effectively. It helps to manage cash flow, reduce bad debt and encourage more payments to come in on time. It's quick and easy to install with customisable workflows to ensure customers are chased at the most appropriate time and method.
Users can benefit from:
• Improved time management
• Pro-active credit control
• More available cash for the business
• Instant overview of money overdue
• Automates day-to-day credit control tasks
• Sends automated emails and letters for payment nearly due and overdue
• Automatically diarises telephone calls
• A quick return on investment, and more…
For further information on the above points or to find out more about Credit Hound, Contact us today
FSB, Pay.UK https://www.p2pfinancenews.co.uk/2020/02/17/sme-finance-cashflow-late-payments/