Chasing late payments wastes time and money for small businesses, as well as posing a serious threat to their survival.
Late paying customers are a frustrating and worrying problem that most small business owners are all too familiar with.
In fact, research shows that on average small UK businesses are owed £24,841in late payments, and one-thirdof small to medium-sized businesses receive payments more than two months after the agreed date. So it’s hardly surprising that according to the government, nearly a quarterof UK businesses say that late payments are a threat to their survival.
Whilst the recommended payment period is 30 days, many businesses take much longer to pay their invoices, putting small business owners in a precarious position.
Just a few of the ways that late paying customers impact small businesses include:
Wastes time and money– Chasing up payments can be a frustrating and time-consuming process that costs businesses in both time and money.
Creates more debt– Late payments have a big knock-on effect on a business’ own cash flow. If your invoices aren’t paid on time it can cause a chain reaction of debt by preventing you from paying your creditors on time too. Many small businesses then turn to credit facilities like loans and overdrafts to cover their own costs, creating further debt.
Stress and worry– Regularly being paid late creates unnecessary worry and stress for small business owners.
Prevents growth– Poor cash flow and uncertainty about when payments will be received prevents small businesses from investing and taking opportunities that could help them to grow.
Small business owners should protect themselves by being vigilant about implementing processes and taking precautions that reduce the risk of late paying customers.
Here at Churchill Recovery we are experts at credit managementand arrears prevention. To find out how we can help your business to implement collection best practices give our team a call on 0333 320 0748.