Liberis recently surveyed 440 UK small businesses and found that levels of aged debt, or sums overdue for one or more defined time periods, are rising. With total unpaid debt now amounting to around £14.9bn, we take a look at how late payments can affect your organisation – and what you can do about it.
Many of those surveyed say these kinds of debts have prevented them from investing in their business. While this might not seem like the most pressing concern, it does suggest that companies are surviving month-by-month, rather than planning for their future.
Even without funds to invest, you can keep planning for the future by regularly updating your business plan and staying on top of industry news and developments. And if you do brainstorm an exciting new idea, there always government grants and alternative finance options to support your development.
72% of surveyed businesses told Liberis that they spend up to three days a month chasing debt. To cut down such wastage, you could consider automating some of your invoicing and communication processes. Free tools like Invoicely or Wave come in handy here.
However, for repeat non-payers or aged debt, it may make more sense to bring in support. In some cases, you can complain to the government’s Small Business Commissioner. It’s a free service, delivers an independent ruling and they take four to six weeks to reach a decision.
The recent European Payment Report found that 44% of UK firms aren’t aware of important regulations like the European Late Payment Directive (ELPD). And with over 60% of businesses willing to accept payment terms of over 60 days, it seems that companies could simply be getting used to late payments. This should not be the case.
As well as engaging with the Small Business Commissioner, your business can also work toward fairer payment practices. Simply including your rights like claiming statutory interest on your invoices will send a message to clients.
If you’re suffering from repeat non-payers, it may be more cost-effective to work with an enforcement agency like Dukes Bailiffs. We work hard to recoup unpaid debt in a sensitive, time-efficient way that won’t alienate your clients. For more information about how we work, contact us today.