Late payment is a big problem for all sorts of UK businesses, but it is especially apparent within the SME sector. Small and medium businesses caught up in supply chains with large chain stores are often kept hanging on for payment, which in turn limits their ability to pay their suppliers on time, passing the problem down the line. though this is a long standing problem for UK businesses, there is evidence to show that actions to improve it could be making things move in the right direction.
D&B, a commercial insight and information company, has recently published a report showing that the payment time taken within the UK has on average improved by 2 days since the beginning of 2012. This takes average payment time down to 15 days over the agreed payment terms – still late payment, but not as late as it once was.
The increasing trend for late payment has got worse in recent years, increasing from 13 days late on average to more than 17 days late in 2011. Things now seem to be moving in the right direction – the results are suggesting that businesses are more in control of their cash flow and have adapted to tighter management of their budgets in the restrictive economic climate that has been prevalent over the last few years.
If your business is still suffering from late payment, however, there are things that you can do to remedy the problem. Invoice finance, including factoring and invoice discounting are great ways to unlock the capital tied up in unpaid invoices, often within 24 hours of releasing your invoice to your factoring lender. This alternative form of funding has been getting increasingly popular in recent years, perhaps in response to the increasing trend for late payment. If your business need some help to cope, then invoice finance might be able to help.