
Finding the root cause
To tackle late payments, the government cannot rely on legislation and guidance alone. It must understand why payments are so often delayed. Perhaps the biggest reason is the overly-complex and time-consuming nature of making business-to-business payments.- Five ways to avoid late payments from larger buyers
- UK suffers from late payment “epidemic” as most firms neglect suppliers
- How late payments became the driving force behind CreditHQ
Aiding money movement
Technology might lie at the heart of these difficulties, but it can also provide a solution. What is needed is a new approach to payments; one that focuses not just on supporting every conceivable method, from PayPal to ewallets, but one which treats accepting and making payments holistically, as part of a business’s wider financial environment. If that sounds a bit nebulous, let me explain. As every business owner understands, individual financial transactions don’t happen in isolation. Making a payment to employees, to suppliers, or to the taxman isn’t just a matter of taking a few pounds from the pot: it involves complex systems including banking, accounting, payroll, pensions, and a host of others. For too long, businesses have lacked the ability to integrate these systems effectively, so that the movement of their money can be controlled, monitored, audited, and accounted for.The payments revolution
Integration is one answer. By working smarter not harder using technology, smaller businesses can benefit from efficiencies that give back time and power. Time to focus on running and growing the business and power over finances. Yet the Holy Grail for small businesses lies in the ability to achieve a single view of the cash position – something that large businesses have benefited from for years through tools such as treasury management dashboards. Having holistic, data-rich, real-time visibility of the money that is owed and future forecast not only empowers SMEs to make better decisions but could eradicate the small business liquidity challenge altogether. After all, businesses might not need to borrow short-term cash from banks if each had better visibility of – and confidence in – the own cash position and a better understanding of cash levers. Tackling the small business payments challenge is anything but easy. Yet the streamlining of age-old financial processes through smart technology means revolution is afoot. And that’s good for everybody. Find out how Sage is revolutionising the way small businesses move money. Michael Carbone is managing director at Sage Payments.Share this story