Late payment pain for small firms highlighted in the Times.
5th April 2019.
Journalist, Sathnam Sanghera wrote in the Times today at the impact late payment has on SMEs.
see the article here – The Times, Page: 43
It is an entertaining read on his own experiences and those of colleagues on the difficulties of getting paid as a freelance writer.
it really serves to highlight the problem of late payment for small independent businesses and self employed people.
Often chasing the late payments is more involved than the original work.
He notes Federation of Small Businesses analysis which suggests about 50,000 businesses fail every year due to larger firms neglecting to settle bills, while Lloyds Banking Group research suggests that 65% of firms which report their payment practices took more than 30 days to settle invoices and 21% took more than 50 days.
Mr Sanghera also points to a Small Business Commissioner report showing that a third of payments to small businesses are late, 20% of small firms have experienced cash flow problems due to late payments, and that the economy would see an annual boost of £2.5bn if bills were settled promptly.
Meanwhile, the Cabinet Office has written to Government suppliers saying they risk being barred from future public sector work if they fail to pay subcontractors on time.
However, Mr Sanghera also highlights the problem, in suggesting that chasing late payment can seem aggressive and that no small business wants to antagonise customers and even if they are not working for them at present, doesn’t want to ruin the possibility of future work.
And there lies the problem.
Late payers know this and rely on it.
James Salmon at CPA says that it is time that small businesses stood up for themselves. Chasing late payments is not being aggressive. The rude ones are the businesses that didn’t pay on time. And if they are not ashamed and embarrassed at an error in paying late then do you really want to work for them again?
CPA is passionate about late payment
The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.
We are passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.
If you were regularly paid late we can help. Those former customers used you to boost their own cash-flow, regularly paying you late.
As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.
Under little used legislation, you are entitled to compensation for those late payments.
Now you can boost your own cash-flow.
CPA can help unearth the those hidden treasures.
We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.
Yes, CPA can help you boost your business cashflow.
Don’t let late payers dominate you, contact CPA today.
Meaningful Financial Compensation for being paid late?
Yes it’s true and the entitlement is enshrined in legislation. It applies to the vast majority of business-to-business invoices in the UK when paid beyond agreed terms.
The Late Payment of Commercial Debts (Interest) Act 1998 has been updated, amended and strengthened over the years but it has still failed to catch the attention of business owners. This is possibly because the legislation is promoted as a means to encourage companies to settle their invoices on time – but IT DOES NOT!
The legislation can however be used to retrospectively claim compensation from ex-customers up to six years after payment (albeit late) was made. With every such invoice entitling the supplier to a minimum £40 compensation, the value of claims can soon accumulate to sizeable sum. For example, if a company is paid late on 30 invoices each month they are entitled to £1,200 per month in compensation. Over 6 years that amounts to £86,400 of pure bottom line profit without making a single extra sale. There is no need to upset current customers either as claims can be delayed until the customer switches to another supplier perhaps!
There are two obstacles to this windfall: –
- The huge amount of time and effort required to analyse the sales ledger and identify which invoices where paid late over the last 6 years and by how many days they were late.
- Having the resources and legal knowledge to successful turn the claim into money in the bank.
The Credit Protection Association plc (established 1914) spent over two years researching the accounting, technical and legal implications of applying Late Payment Legislation retrospectively and now offer a solution. Clients usually need to spend less than an hour with CPA’s experts who will then produce a full list of potential claims usually within 3 days.
The client then decides which claims to withhold until later and The Credit Protection Association plc uses its many years of collection experience to recover the balance of the claim. They positively encourage clients not get involved with communicating with Late Payment Compensation debtors as they have a team of trained experts to explain the legislation and procure payment.
They are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds with no outlay whatsoever once the recovery process has begun.
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0330 053 9263
The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
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