Late payments and their effect on mental health
Recent research conducted by Pay.UK has revealed that more than a quarter of SME business owners are stressed about late payments even when they are not in the office. A staggering two thirds (66%) have reported that late payments make running their business less enjoyable, and around 10% have needed professional support and counselling to […]
Recent research conducted by Pay.UK has revealed that more than a quarter of SME business owners are stressed about late payments even when they are not in the office. A staggering two thirds (66%) have reported that late payments make running their business less enjoyable, and around 10% have needed professional support and counselling to help deal with the stresses they incur when dealing with not being paid on time or at all.
SMEs report being paid late 54% more than at any time since 2015, with a total late payments bill of £23 billion in 2019 – up from £13 billion in 2018.
Paul Horlock, CEO of Pay.UK, said: “Over the years, the late payment research has become an established barometer of SME financial health, and has offered an invaluable insight into the challenges faced by SMEs. For the first time this year the research has also looked at the human, as well as the business cost of late payments, and we hope that this can contribute to the wider debate regarding this important area.”
Employers are waving goodbye to their own salaries
One in five business owners are not paying themselves because unpaid invoices are affecting their cashflow. It’s even worse for small firms employing under 10 people where 40% of business owners questioned said their take-home pay is zero. A report from BACS found that a quarter of businesses facing late payments had to rely on bank overdrafts to make essential payments, while 28% of company directors reduced their own salaries to keep essential working capital inside their businesses.
When money is in your customers bank account you can’t use it. You are unable to support new sales, employ new staff, buy new equipment, or give yourself a dividend. You may also struggle to make new plans for your business as late payments can make it extremely difficult to create a cash flow forecast, preventing you from investing in new opportunities. Also, the longer debt is outstanding the harder it then becomes to recover, leading business owners to feeling the need to reduce the debt just to get some of the funds back or accepting total loss. All of these factors are resulting in a negative impact on business performance, but more importantly the mental health and wellbeing of SMEs and their employees.
Here at Daniels Silverman we understand the importance of mental health and the effect it has on business performance. When running a company that you’ve invested your hard work and time into, you want to ensure that you’re not suffering mentally due to external issues such as late payments. We offer our services to help lighten this burden and relieve the stress that comes with dealing with outstanding debts.
Your reputation is at the heart of how we conduct our services, ensuring that we deal with your clients in a sensitive but firm manner to ensure you reputation remains unharmed.
If you would like further information on how we can help your business, you can contact us via our website https://www.danielssilverman.co.uk/ or if you would prefer to speak to someone in person, you can call the office directly to speak to one of our friendly team 0151 707 6061.