New figures from the British Chamber of Commerce have revealed the true extent of late payment amongst UK businesses. This has long been a prevalent problem amongst the country’s SMEs, but this recent survey shows that it is in no way improving.
According to the Prompt Payment Report, a new survey of 5,343 businesses, 94% of respondents have been paid late in the past. Over a quarter of those asked experienced delays in over 40% over their payments. This shows the extent of late payment throughout supply chains – one of the big issues surrounding late payment is the domino effect down through the chain, causing all sorts of businesses to struggle with limited cash flow.
62% of respondents said that private sector businesses are more likely to make late payments than SMEs or public sector organisations – although they are harder to engage with in the event of delayed payment. This shows another cause of supply chain stagnation when different businesses work together.
SMEs often suffer from late payment not only by being caught up in supply chains with larger private sector businesses but also due to their invoicing procedures. While larger businesses might have a dedicated billing department, often the infrastructure of smaller companies isn’t so well defined. If your small business is struggling with cash flow and needs some of the pressure releasing, then invoice finance could help.
Factoring could be a particularly suitable option. This option means the factoring lender will take over all collection duties and act as a full credit control service for your business. This will reduce the man hours you need to dedicate to collection, as well as releasing up to 90% of the invoice value within 24 hours. Invoice finance can not only ease cash flow pressures but will also help you to get on with what’s most important: running your business.