According to recent research, more than a third of SMEs have seen payment times increase by more than three weeks. The research which surveyed 500 UK SMEs, found the following results:
- 55% were being paid late due to the coronavirus
- 36% saw payment times increase by more than 3 weeks
- 12% have customers who are refusing to pay their invoices
- 28% have had an increase in bad debt
- 14% have turned down new business
- 11% have kept staff on furlough, even though they need their staff to complete the work
- 34% of business owners haven’t had a day off since lockdown began in March
- 27% reported a decline in work life balance
- 56% would not be able to meet running cost beyond 12 months
Commenting on the latest findings, Sean Husband, Director of My Debt Recovery commented:
“Late payments have always been an issue, especially for SMEs, where non-payment can mean the end of a business. So, it’s sad to see that SMEs are turning work away due to cash flow issues, especially at a time when we need the country to get back to some kind of normality.
With Government support coming to an end and short term fixes like bounce back loans needing to be paid back, it’s important that SMEs create a clear plan on how they will manage their cash flow moving forward. This research shows how much money is tied up in late payments, so rather than seeking additional funding, SMEs should be focusing on how to release funds tied up within their debtors’ ledger.
We see it so often that businesses seek additional funding to help manage their cash flow, when they have the funds they need sitting in unpaid invoices. My advice is before doing this, work through your debtors’ ledger to see what can be released. If you don’t have the resources to do this, I would recommend that you outsource to a debt recovery agency.
Businesses like ours have years of experience in dealing with some of the most difficult recoveries, along with offering a no collection, no fee. By outsourcing your debtors’ ledger, you can focus on growing your business, whilst we work hard to get back what is rightfully yours.”
If you are struggling with late payments and have exhausted all avenues or you just want your time back to focus on your business, contact our team today to see how we can help.