Late payments put pressure on small firms – Business news 5 April 2022

James Salmon, Operations Director.

Late payments put pressure on small firms. Half a million SMEs at increased risk of collapse. Firms trial a four-day week. Discretionary spending expected to fall by 6.5%. HMRC: 142k taxpayers use Time to Pay.  And more business news.

Late payments put pressure on small firms

Small businesses are under increasing pressure, with delays payments and staff shortages on the rise, according to research by accountancy software firm Xero. Analysis of  half a million small firms has revealed an increase in late payments since the start of the year, with invoices settled 8.2 days beyond their payment terms.

This marks an increase of 2.5 days since January and the biggest typical delay recorded since August 2020.

The report also reveals that a surge in job creation in the first half of last year petered out in H2, while small firms employed 8.4% fewer people in February than in the same month two years ago. Xero’s analysis also shows that wage bills increased by 4.3% in February, with this coming on the back of surging inflation and a tight labour market.

Despite pressures around payments and staffing, small firms registered a sales uptick in February, with an 8.8% increase when compared with the same month in 2020. Xero’s managing director, Alex von Schirmeister, said that while sustained sales growth is “an encouraging sign” for small businesses, “it doesn’t offset the other challenges they face.”

Half a million SMEs at increased risk of collapse

More than half a million people are working at small companies which are at heightened risk of insolvency, according to analysis by Quantuma.

Faced with late payments, rising prices, higher taxes, the fallout from Brexit and pandemic-related staff shortages, around 6,500 SMEs are at higher than average risk of going bust.

The study found that start-ups that are up to three years old are at particular risk. Quantuma says corporate insolvencies will return to 2019 levels this year, with Covid-related support and protection having come to an end. It forecast a “sharp acceleration” in insolvencies in the second half of this year. It predicts that by 2024, corporate insolvencies will reach the highest level in a decade, with 19,000 businesses a year likely to fail.

Firms trial a four-day week
Following successful schemes in other countries, UK companies are taking part in a four-day working week trial to see whether workers can maintain the same level of productivity while working for a day less with no reduction in pay. As of June, more than 60 UK businesses will a start a six-month trial of the four day week for more than 3,000 employees. In most cases, the hours worked in the week remain the same, with the four working days longer than those in a five-day week. The initiative is being co-ordinated by 4 Day Week Global in partnership with the think-tank Autonomy, the 4 Day Week Campaign and researchers at Cambridge University, Boston College and Oxford University. In Iceland, four-day working week trials were considered an “overwhelming success” with 86% of the country’s workforce now working shorter hours or gaining the right to shorten their hours. Microsoft Japan saw a 40% gain in employee satisfaction and productivity during a trial of a four-day week, while Bolt found that 86% of staff increased their productivity and efficiency and has made the shorter week permanent.

Discretionary spending expected to fall by 6.5%
Discretionary spending is set to fall by an average of £430, or 6.5%, in 2022, according to analysis by Retail Economics and HyperJar, a digital wallet and savings app. This equates to a £12bn fall in non-essential spending. The report adds that for the least affluent households, the decline will be £850, or 19.5%. Richard Lim, chief executive of Retail Economics, said: “We’re likely to see recessionary behaviours kick-in for many households, who will cut back on the nice-to-haves and will prioritise low costs to make their budgets stretch that little bit further.” He added that a “more cost-conscious consumer will emerge in the coming months.”

HMRC: 142k taxpayers use Time to Pay
HMRC data shows that more than 142,000 taxpayers have used the online Time to Pay facility to spread the cost of their self-assessment tax bill since April 2021, utilising the service to pay nearly £475m worth of tax in instalments.

Stamps soar

The Royal Mail is raising the price of a first class stamp 10p to 95p and second class stamps have also increased by 2p to 68p as they seek to cover higher delivery costs while the number of letters being sent falls. Royal Mail said it was having to deliver to a growing number of addresses, which was adding to costs. The price of first and second class stamps have more than doubled since 2010, when they cost respectively 41p and 32p. In 2000, thy were just  27p and 19p. Meanwhile Royal Mail’s profits increased fourfold.

Nuclear energy

According to reports, the UK could build up to seven new Nuclear plants by 2050. In an interview by interview with Business Secretary Kwasi Kwarteng with the Telegraph he said “There is a world where we have six or seven sites in the U.K.” by that time, Kwarteng said. Ministers plan to create a development vehicle, Great British Nuclear, to identify sites, accelerate planning and line up private companies to run each site. There are also separate plans to build a huge wind farm in the Irish sea in the next year.

Channel 4 sale

The UK government is to proceed with plans to privatise Channel 4 the terrestrial broadcaster. Representatives for Channel 4 are said to be disappointed that public interest concerns have been ignored.


Tesla’s Elon Musk has become twitters biggest shareholder after taking a 9.2% stake.

Why should you become a CPA member!

The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid since 1914. We have seen many financial crises, this one will be particularly deadly for suppliers for some time to come.

CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. And we provide credit information so you can monitor and assess your key customers.

Unlike other credit management companies, we charge our members a fixed annual subscription irrespective of how high the debt value is!

It takes less than 17 minutes to see how you would benefit, do you have the time now?

No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email today.

When you see your money come in, you will be so glad you used CPA.

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections


Do you have a commercial late payer that is causing you grief? Use CPA’s no-win, no-fee, commercial debt recovery service!

If you have a particular business customer who is late paying and causing you sleepless nights, why not offer it to CPA for purchase on recourse?

CPA’s collection department will then pursue the debt. We will be liable for any costs incurred and then when we have recovered the debt, we will pay you the net principle debt recovered less our percentage.

Once you have enjoyed that success then you can consider the more cost effective membership which includes our Overdue Account Recovery service and Status/Credit reports as well as a range of other complimentary services.

Just call  020 8846 0000 and ask for Godfrey Nelson or Cris Shirley (business hours) or email today.

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.


Get compensated for previous late payments

Have you been paid late by business customers in the last six years?

Maybe you no longer work with them. Under legislation, you are entitled to  compensation you for those late payments you have suffered.

You put up with the PAIN – now claim the GAIN!

Claim late payment compensation (LPC) from former business customers who paid you late in the last six years!

CPA (LPC) Recoveries is using our bespoke software and decades of experience to do just that for our clients

Check our compensation calculator to see how much your business could be owed!

Discover NOW the potential value of late payment compensation hidden in your sales ledger!

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.