Late payments hitting SME workers.
16th April 2019.
2.2 million employees – SME workers – are reported to get paid late due to company cash flow issues.
QuickBooks has revealed in a research project that UK businesses regularly fail to pay their staff on time.
In its global research project “The State of Small Business Cash Flow”, which focused on the behaviours, attitudes and status of cash flow challenges experienced by small businesses and the self-employed, the UK findings highlighted the issue for employees.
The research showed that UK businesses faced many cash flow problems:-
- About 1 in 7 UK small business owners have been left unable to pay employees – which means 2.2 million SME workers in the UK may not have been paid on time because their employer had cash-flow issues.
- 57% of UK small business owners have experienced problems with their cash flow.
- Over a third (38%) of UK small business owners who have had cash flow issues have been left unable to pay debts
- UK small business owners lose £26,000 on average by being forced to turn down work, specifically due to issues created by insufficient cash flow
The biggest causes of cash flow issues are 1) late payments from clients and customers, 2) a fall in sales and 3) a lack of strong cashflow management.
Problems with cash flow can ultimately seriously endanger a small business’ capacity to continue operating, resulting in management being unable to pay staff and suppliers.
The issue of late payments was recently addressed in the Governments Spring Statement as a major concern for UK small businesses. According to statistics from the BACS payment scheme, the direct cost of late payments to small businesses is £2 billion.
The Government has committed to the introduction of payment practice reporting, which will require large companies to review and report on how they’re paying their suppliers in their annual accounts.
The QuickBooks research showed that UK small businesses have on average £31,055 in outstanding debts due to them and 71% of small business owners have had sleepless nights because they were worried about cash flow.
Chris Evans, VP and Country Manager at Intuit QuickBooks, said:
“Cash is oxygen for small businesses and without it they cannot breathe. The combination of chasing invoices and bad payment practices mean small businesses run out of accessible cash. This has a real impact on their ability to take on new work, pay suppliers, their employees or themselves on time.”
Do you have a problem with late payments?
The Credit Protection Association can help!
Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
If you supply to businesses on credit help us help you identify the risks.
Why use a third party collector?
As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When you customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
Over the years we have collected billions in overdue invoices for our customers.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
Do you realise you may have hidden capital tied up in your business?
No need to run to banks of other finance providers
Do you realise you may have a hidden source of capital within your business waiting to be activated?
If you trade with other businesses and were often paid late then you could be entitled to significant compensation.
Under little known and underused legislation your business could be due huge amounts in compensation that you didn’t even know about.
That compensation could be the cash injection your business needed.
Are you thinking about retiring, closing the business down or going into insolvency? If so this compensation could be an excellent way to maximise the return you get for their years invested in the business.
If you collect the compensation you are due on late payments then you could create a nice nest egg from the business or find the funds to rescue it from insolvency.
How can CPA help?
CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hardwork. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.
The Credit Protection Association plc (established 1914) has spent 3 years researching the accounting, technical and legal implications of Late Payment Legislation and our staff and retained solicitors probably have as much working knowledge of this legislation as could be found anywhere.
We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.
Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.
CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.
The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit. You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.
We do the work, you receive the cash.
If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.
We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.
We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.
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 your bankers control you, contact CPA today.
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
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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