How late payment doesn’t have to affect your business

11/01/2017

It’s no surprise that late payment will continue to cause problems in 2017, and with new research suggesting that six in every ten invoices are unpaid at due date, it is a major worry that 70% of businesses rely on being paid within terms to avoid a working capital shortage.

Deeper analysis of the research conducted by Amicus Commercial Finance shows that matters are actually much worse than this. After 90 days, one in six SME invoices remains unpaid – and of these, almost half are still outstanding after six months. Further research has proven SMEs are the worst hit, and subsequently affected by the complications of severely stretched resource and cash flow gaps.

It would seem the cash flow problems experienced in previous times are set to continue into 2017, but it doesn’t necessarily have to be this way. This year, taking back control of your sales ledger may be easier than you had previously anticipated.

Here are three stories of businesses we have worked with who have managed to overcome the demands of late payment. Here’s how they did it:

Pruning the bad leaves

Having a large invoice remain outstanding can be extremely frustrating, particularly if your ability to take on future contracts is inhibited due to cash flow restraints. There may come a time where enough is enough, just as Alan Beaumont, director of Greenfingers (Kenilworth) Limited, decided. Having offered unusual credit terms to a regular customer who did not pay on time, and with the customer uncontactable, read how he managed to recover the payment and get back on the road to success.

Taking decisive action

Just like buses, overdue invoices often appear around the same time. If this happens to your business, you may find the strain and resource spent chasing the individual cases detracts directly from essential duties, producing greater problems. Crystal Interactive, having accumulated several overdue invoices with a collective worth of £11,000, decided the potential loss to the business was too great, so they made a call that changed everything. Read more about their experience here.

A chance to refocus

Keeping on top of your customers can be a difficult task for any business, especially one that is experiencing rapid levels of growth. This was the case for Matthew Hartie, Managing Director of Construction Recruitment Services Ltd, who recognised his time was better spent furthering his company’s great success as opposed to managing credit control. So he set out to find experts to handle his company’s sales ledger and ensure the resource required for this important task did not impede on his future plans for growth. You can read how he did it here.

If you, like the above mentioned, would like to have greater control over the future by ensuring your business is paid on time to facilitate the growth desired, we may be able to help.

For further information to help you make your decision, read our blog, ‘Credit control: in-house or outsourced’.

Alternatively, our team of debt collection experts would be happy to answer any questions you may have, and can be reached on 0800 9774848 or emailed at collections@hiltonbaird.co.uk