Firms Fear Late Payers Could Ruin Business

18th April 2018.

Many manufacturing and service sector firms are worried that late-paying clients could wreck their business, according to a major study of business sentiment in Yorkshire.

According to the latest Sheffield City Region Quarterly Economic Review (QER), two-thirds of bosses at firms see late payment as a threat to their business’ success. Despite the sentiment expressed by the Chancellor and Small Business Commissioner, late payment continues to torment the business world. While the overall economic picture painted by the QER is relatively positive, cash flow remains a consistent problem, with vulnerability exposed by every late payment. Suppliers continue to fight an uphill battle with customers, with payment terms continually exploited, and trade relationships injured. As a result, many business owners are experiencing gaping holes in their cash flow and diminished confidence in their future prospects.

It is important that a business has strong cash flow, so it can pay its suppliers, employees and pursue growth aspirations. At the Credit Protection Association, our debt recovery services chase down late payers and satisfy any unpaid invoices, giving our members the financial boost they need.

Malcolm Pope of Shorts Chartered Accountants said firms should be prepared for any potential cash flow problems. He further stated that companies should assess the efficiency of credit control procedures, monitoring how well they are collecting debts and how much debt is overdue.

“Companies should also look to secure the right type of growth”, he added. Mr Pope cautioned against taking on work with very low margins, because it leaves a company with less room for manoeuvre if something goes wrong.

Dr David Littlewood, a lecturer in strategic management at Sheffield University Management School, said: “This quarter’s hot topic focuses on cash flow and supply chains.

“Cash flow balances for both services and manufacturing firms across the city region, while positive, are down compared to the previous quarter and their position compared to this time last year.

In order to keep pace with rival economies, as well as the competitive high street, UK businesses need to boast a strong cash flow. This means ensuring all payments are paid promptly and all past debt is swiftly recovered. Whether you trade in the retail or services sectors, or within financial services, all firms should strive for that competitive edge. Positive cash flow not only keeps the business afloat but also opens up new opportunities for expansion and access to newer and brighter technology and services.

At the Credit Protection Association, we boast both debt recovery and credit management products, ensuring that once we raise our members’ financial status, it stays that way.

Not only does our team free up cash flow and spring clean finances, we also have a special scheme using this little-used legislation that helps business owners realise a hidden source of cash and unlock hidden potential within their business.

So if you are overwhelmed by late payers, don’t suffer in silence- come and talk to one of our teams at CPA.