Sharon Walker, debt recovery manager at regional law firm Napthens, a Boost & Co member, offers some advice on how growing businesses can avoid late payment and reduce the risk of bad debt.
Late payment is costing businesses in the UK billions each year. Recent figures from Bacs Payment Schemes Ltd, the company behind Direct Debit, showed that small to medium enterprises (SMEs) are owed a total of £14.2billion.
The statistics from Bacs show that of the 1.7million SMEs in the UK, around a third wait longer than agreed terms of payment. Companies must spend time chasing these payments, which have staffing and financial implications, and may even result in bankruptcy in extreme cases.
At Napthens, clients faced with the issue often report similar reasons for facing late payments. Here are our top five excuses for late payments, reported by Lancashire businesses:
To help ensure your business is paid quickly, follow these top tips:
Businesses facing late payment pressures should consult their advisers as soon as they can to prevent the issue getting out of hand.