Carillion’s liquidation has highlighted just how shocking the payment procedures of corporate firms are and the risks SMEs find themselves in as a result.
New research has shed further light on the late payments issue having an adverse affect on British enterprise, with 11 per cent owed more than £100,000.
As much as we love Christmas, it can be a challenging time for small businesses. For some it is a peak period of the year. While this seems like a great thing on the surface, it actually throws up all sorts of issues to be dealt with by over-stretched management teams – and could lead to a cash flow crisis.
The effects of slow payments include damage to the supply chain, damage to business reputation and, in some cases, it can even affect credit ratings and therefore future access to funding.
Anthony Persse, director of strategy at Ultimate Finance discusses the potential solution to late payments, which keep plaguing SMEs.
As part of the business cycle, things traditionally slow down in August, as people take their vacations to match the school holidays. This means decisions are often delayed and deadlines missed – none more so than making payments.
While the late payments issue continues with just 51 per cent of invoices paid on time, a breakdown of areas shows that Manchester is the least affected.
The Reporting on Payment Practices and Performance Regulations programme has come into force. This is a crucial step to help tackle the late payments issue that has been a consistent drain on smaller firms and suppliers.
Chelsea may have won the Premier League for 2017, but it’s Manchester United that comes out on top for its mass of unpaid invoices.
The Federation of Small Businesses (FSB) has claimed SMEs account for 99 per cent of all private sector businesses in the UK. Although a large number of these businesses thrive, many SMEs struggle with basic cash flow issues as a result of late payments.
As anyone who has been in business will know, controlling cash flow is an essential part of staying afloat. Here are some tips to stay on track this year.
Britain’s small and medium-sized enterprises (SMEs) are under attack, with the unexpected perpetrators being their own customers and the country’s culture of late payments.