Greater resources needed to fight late payments to SMEs

3rd December 2019.

James Salmon, Operations Director.

Greater resources needed to support small firms

Paul Uppal, the former Small Business Commissioner, has called for more resources to help fight late payments for SMEs.

Paul Uppal, who stood down as small business commissioner in October, said that the budget for the commissioner, which mediates on payment disputes and promotes fairer treatment of suppliers, was too small and that he had been greeted with “radio silence” from civil servants and ministers over his approach to the job.

Paul Uppal says a lack of resources and indifference from Whitehall officials have thwarted attempts to ensure small firms are treated more fairly by large customers, saying his budget was too small to fight late payments and tackle the “huge task” of getting big businesses to pay their bills on time.

He said his successor will need more financial and strategic support from the Government, with more resources needed if the Small Business Commissioner “is going to do the job” and fight late payments.

Bill Esterson, Labour’s Small Business Minister, agreed that  small companies were being failed because the commissioner does not have the resources required.

See below how CPA believes current legislation can be used to fight late payments.

Ban late payers from government contracts

Supply chain managers have called for late payers to be banned from government contracts.

Company directors at large firms must be held responsible for poor payment practices and big businesses that are too slow to pay their suppliers should be barred from public sector contracts.

The Chartered Institute of Procurement & Supply says 70% of those surveyed said that non-executive directors on the board must oversee payment performance to prevent businesses from abusing their suppliers.

Almost two thirds of the 817 people surveyed believe that the governments proposed Prompt Payment Initiative to block late payers from tendering for government contracts will also help to tackle the problem.

Late payments and the knock on effects to the cash flows of small businesses are said to kill off 50,000 small businesses a year.

Only 5% of those surveyed didn’t think there was a problem and believed all invoices are paid promptly, rather one in six said they found most payments are settled late.

More than half of companies believe large businesses force long payment terms on their suppliers because they “know they can get away with it”, the institute said. Malcolm Harrison, chief executive, said there was a “rotten culture” of late payment.

Research from Hitachi Capital UK, a finance firm, found that one in three small and medium-sized businesses experienced late payments of £10,000 or more in the last year.

One in four said the issue had damaged profits, while one in ten deferred staff wages and four in five had drawn on personal savings to fill cash-flow gaps caused by late payers.

See below how CPA is using current legislation to fight late payments.

SME bosses warn of challenges ahead

A poll by small business platform Xero shows that a quarter of small business owners believe their company will go bust within 5 years.

The survey saw 54% warn that late payments pose a risk to their firm, while 44% voiced concern over tax rates and the same proportion pointed to uncertainty over Brexit.

Some 31% said maintaining or increasing levels of productivity presented a challenge, while 27% cited the risk of cyber-attacks, 25% were concerned by rental costs, 21% said retaining staff was an issue and 19% flagged the cost of recruiting new workers.

The study of 500 business owners reveals that 40% believe the current climate is the most turbulent period they’ve ever experienced as an SME owner, while more than a third said their mental health has been affected by running a firm.

The report shows that, on average, owners work an extra nine hours a week and have pumped £11,846 of their own money into their business.

CPA is currently helping SMEs fight late payments and not only filling the hole in the cash flow but boosting it by getting them compensation.

Christmas concern for small businesses

Research from online marketplace Not On The High Street shows that 22% of small businesses say they will be forced to close within the next 12 months if they experience below average Christmas trading, with almost one in 10 saying they would be forced to shut within weeks.

The analysis shows that while the average consumer plans to spend £362 on gifts this Christmas, just £92 of that will be with small businesses.

Not On The High Street chief executive Claire Davenport said: “Brits love to shop with small businesses and believe they support them but they aren’t quite putting their money where their mouth is.”

Figures from KPMG show that 44 retail businesses went into administration in the six months to September.

Banks tighten lending to SME retailers

Figures from Moore show that lending to SME retailers has fallen 6% since 2016.

Lending to SME retailers has fallen from £15.6bn to £14.7bn, with banks more reluctant to hand out loans amid Brexit-related uncertainty.

Despite the fall in loans to smaller entities, lending to large retailers by banks rose by 20% from £31.5bn to £37.8bn.

Bridget Culverwell, director at Moore, said: “It is a real worry for smaller retailers if banks are treating them less favourably than larger retailers.”

She added that banks are expected to be “apprehensive to lend to the sector in the months ahead” while the final outcome of Brexit remains uncertain.

UK ahead of France and Germany in SME stakes

Analysis of 13 economies by Euler Hermes concludes that Britain provides a better environment for SMEs than France and Germany.

Canada was rated the best place to run an SME, followed by Hong Kong and the United States.

Britain was ranked seventh in the list of large and developing economies with its strong showing in areas such as access to finance offset by issues such as the relative difficulty its companies have in doing business overseas.

Parity with larger companies when it comes to corporation tax rates also went against Britain. Canadian small businesses pay a corporation tax rate of only 9%, compared with its standard rate of 28%.

BDO in ‘pro-enterprise, pro-business’ call

Stuart Lisle, co-chairman of BDO’s Brexit taskforce, calls for a “pro-enterprise, pro-business agenda” from the next government, saying it will “put Britain on the front foot.”

He notes that BDO has created a “new economy” manifesto to champion those running mid-sized entrepreneurial businesses.

He says the new government should prioritise local infrastructure projects as well as higher-profile national initiatives and suggests manufacture require targeted support

Do you sell on credit?

With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.

Those customers will look for the easiest option  to boost their cash-flow. Don’t let it be you.

You can’t just assume your customers can and will pay you eventually, no matter how big their name is.

It is essential to have credit management systems in place to monitor and check your customers credit worthiness.

It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.

About CPA

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 cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.

If you supply 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 your 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. We can help you fight late payments!

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.

You might be hesitant about contacting a debt collection agency. What are they going to be like?

Can they help your particular type of business?

There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.

Debt collection agencies are not all alike.

Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and  has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!

At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.

The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.

We are polite, firm and efficient when it comes to recovering outstanding debt.

“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has  helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire

“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington

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


Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

CPA is passionate about fighting late payments

The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.

We are extremely 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 cashflow, 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 cash-flow.

Don’t let your bankers control you, contact CPA today.

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

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

The “Why” of the late payment culture.

New PM should walk the walk and back small firms over late payments

Paying late is “crack cocaine” to big business.

Late payment culture risks “spiraling out of control”

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

Do you realise you could be sitting on a fortune?

Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.

If you sold B2B on credit then there may be a hidden source of capital you can call on.

If you fancy an bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.

Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.

We can help you uncover the pile of gold, you didn’t even know you were sitting on.

If you trade with other businesses and were often paid late then you could be entitled to significant compensation.

Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.

Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.

You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payments.

That compensation could provide the cash boost your business needed.

But don’t delay, that compensation evaporates if not claimed within six years of the late payment.

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 hard work. 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.

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 business owners  who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.

Those former clients who regularly paid you late can finally be made to pay.

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!

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

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