“For many small businesses, the difference between getting paid in 60 days and 90 days can be vital. Cashflow problems due to late payments are a real problem for SMEs in this country and with first quarter figures showing a rise in insolvency among smaller businesses, it is an issue that needs to be robustly addressed.
Late Payment Frustration within FSB
The construction industry has been given a reminder regarding new rules on paying their suppliers that will come into force in September. The Federation of Small Businesses (FSB) campaigned hard for the issue of late payment of invoices to be dealt with by the government with The National Chairman of the FSB, Mike Cherry, speaking of his frustration with the current situation, “Small businesses are sick and tired of being left out of pocket by some unscrupulous big businesses taking advantage of this imbalance in power to improve their own balance sheets or mask their own financial failings. Nobody should want to see small business owners turning to personal credit cards or overdrafts because of late payments, or even worse for a business to go under as a result of not getting paid.”
A statement was made in November of last year by Cabinet Office minister Oliver Dowden who has tried to address the issue, stating that large companies could be prevented from getting major government contracts if they did not pay at least 95% of their invoices within a 60-day period.
The minister raised the subject again this month with leaders from the construction industry at the Royal Institution of Chartered Surveyors’ annual construction conference where he reinforced the point by saying, “Small businesses are the back-bone of the UK’s economy, so it’s vital that we support them – and one of the key elements of that is making sure they are paid on time.
“For many small businesses, the difference between getting paid in 60 days and 90 days can be vital. That is why I have warned big businesses they must do their bit and I’ve been clear that they could lose out on valuable government contracts if they don’t.”
The minister has written to more than 10,000 businesses to warn them that the new payment rules will come into force on September 1st and that there will be consequences for those businesses that do not comply.
Cashflow problems due to late payments are a real problem for SMEs in this country and with first quarter figures showing a rise in insolvency among smaller businesses, it is an issue that needs to be robustly addressed. Cashflow is the number one cause for businesses to fail and repeatedly late payment is a contributing factor to this. Despite this, many SMEs are unwilling to chase late payments or debts and research has shown that many people are hesitant to do this due to how awkward or uncomfortable it makes them feel coupled with the fear of alienating or antagonising a client that they wish to keep. The fear of losing future business is damaging their business in the present.
Get Payment On Time
This is where it pays to work in partnership with an established and reputable agency like Daniels Silverman who will take time to understand your business needs and work alongside you to ensure that you are paid on time, every time.
Our expertly and ethically trained staff can provide credit management services that ensure that your invoices are paid on time. They are skilled at working hard to ensure that you get your money while at the same time protecting the relationship you have with your clients. The cost of being paid on time should not be the loss of a client or future revenue.
We can white label our services so that we act as part of your team and give your clients friendly reminders of their outstanding invoices. You receive a professional service with a high level of success and your client has a point of contact for any queries.
We don’t charge commission, we work on a flat fee basis so that you are in total control of what you spend depending on the number of invoices you want to be collected. We also provide a same day service allowing you to keep your accounts up to date and accurate.
Effective Credit Management
A key part of any effective credit management routine are regular credit checks. This should be both for new customers as well as those who are seeking an increase to their credit limit. As part of the service provided by Daniels Silverman, we credit check your customers if they are experiencing issues paying your invoices on time.
For more information about how Daniels Silverman could support your business please get in touch.