On the 17th September 2018 The Greater Birmingham Chamber of Commerce released an article about Mr Paul Uppal, the Small Business Commissioner. He is tasked with supporting the UK's 5.7 million small businesses (those with a turnover of less than £6.5 million and less than 50 employees, which is 99% of all private sector companies). The article is about the Government's late payment crackdown.
The Department for Business, Energy and Industrial Strategy (BEIS) states that one in three payments to small businesses are late (beyond the agreed payment terms), with the average value of each payment being £6,142. As a direct result 20% of small businesses encounter cash flow problems due to late payments, that's 1,140,000 small businesses having the same cash flow problems due to customer late payment. Apparently, the annual cost of this late payment to these small businesses is £2.5 billion! This demonstrates that if you are experiencing late payment of invoices, you are not alone, it is nothing to feel embarrassed about, the only shame is not taking action to deal with it.
Mercian Law suggests that even before entering into a contract with a customer, get a company report and as much financial information as possible. It will be time and effort well spent. Even with positive customer referencing and checking, late payments can still happen. Have a robust procedure for dealing with late payment. The sooner action is taken the better your chances of getting paid. Mercian Law can provide additional support if your late payment procedure has not resulted in payment. If you have something to discuss with us, why not try our free live chat service on our web site.