Late payment getting worse, rather than better – Business news 8 March 2022
James Salmon, Operations Director.
Late payment getting worse, rather than better. UK faces biggest income squeeze in nearly 50 years. Economic Crime Bill speeds through Commons. Bulb Energy rescue set to cost taxpayers billions more. Retail sales jump in February. And more business news.
Late payment getting worse, rather than better
Liz Barclay, the Small Business Commissioner, has admitted that late payment is getting worse rather than better, even if the UK economy is coming out of covid.
Almost a year to the month she became the Small Business Commissioner – A role which was created to tackle late payment – Ms Barclay admitted that as a “problem,” late payment is “probably” bigger than it was.
In fact according to a new survey by WondaPay, 24% say getting paid late has become “more common” in the last 12 months.
That compares to just 12 per cent of contractors who last month told the firm, an escrow service for independent workers, that prompt payment was getting “better.”
As a small business are you affected by late payments? Are you hearing more excuses than ever for delayed payments? Are you forced by your customers to accept excessively long payment terms?
The survey found almost 40% of small businesses had to wait four weeks for payments to arrive. 13% had to wait as long as two-to-three months and 6.2% had to wait “longer than three months”.
Most find that big business customers impose their own payment terms on their SME suppliers. 30 day terms may often be viewed as standard, however many insist on 30 days from the end of the month, which easily turns into almost 60 days and some just insist on straight up 60 day terms.
Big businesses see this as an easy way to boost their own cashflow but they fail to understand the impact on their suppliers and do not appreciate that the health of those smaller suppliers is absolutely vital to their own. Big business need to pay them quicker, ideally within 30 days.
Instead we are in an environment where it is common for small businesses to spend excessive amounts of time chasing invoices when that time could be used far more productively.
According to the survey 15% spent up to 2 hours chasing invoices each month. 14% invested between three and eight hours chasing each month and, somehow, four per cent lost “8-plus hours” trying to get paid what they are due.
If you are affected, talk to CPA about how we can help take that burden off you. No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
UK faces biggest income squeeze in nearly 50 years
The Resolution Foundation has warned that a typical household’s income will fall by about £1,000 this year once the effect of inflation is accounted for. That would be the biggest real-terms fall in incomes since the mid-1970s, the think tank added. It expects inflation to peak in April at 8.3% – much higher the Bank of England’s forecast of 7.25% back in February. “Britain has stepped out of a global pandemic, and straight into a cost-of-living crisis,” said Adam Corlett, principal economist at the think tank. “The tragic conflict in Ukraine is likely to further drive up the price of energy and other goods and worsen the squeeze on incomes that families across Britain are facing. Inflation may even exceed the peak seen during the early 1990s, and household incomes are set for falls not seen outside of recessions,” he added.
Economic Crime Bill speeds through Commons
The Government’s Economic Crime Bill has been voted through the Commons unopposed as British lawmakers rush to stop wealthy Russians using the City of London for money laundering and hiding ill-gotten gains. The bill, which now goes to the House of Lords and is expected to become law later this month, contains several measures to tackle oligarchs and companies associated with Vladimir Putin. Foreign owners of UK companies will be forced to declare and verify their identities with prison sentences of up to five years for those who fail to do so. Unexplained Wealth Orders will also be strengthened, and the bill will make it simpler for UK authorities to sanction individuals already punished by allies such as the US and EU.
Bulb Energy rescue set to cost taxpayers billions more
Government officials have said that keeping Bulb Energy running will potentially cost taxpayers billions of pounds more than has currently been set aside. Bulb was quasi-nationalised in late November when it was put into special administration as it buckled under rising wholesale gas prices. Since then, prices have risen from around £2 per unit to £4.70 in December and as high as £8 on Monday. Government officials have conceded that the prospect of offloading the business to a private buyer seem remote in this environment and that means that taxpayers will be on the hook for a gas bill that energy analysts believe could run to billions of pounds.
Retail sales jump in February
The latest retail sales monitor from the British Retail Consortium and KPMG revealed that total sales jumped by 6.7% in February – 2.7% higher than a year ago on a like-for-like basis. Non-food sales increased by 12% over the three months to February, compared with the same period a year earlier. Paul Martin, UK head of retail at KPMG, commented: “Clothing and footwear categories witnessed the highest growth, most double digits in February as restrictions were lifted and consumers re-stocked wardrobes, heading back to offices and embracing life living with Covid.” Meanwhile, Barclaycard’s consumer card spending data showed that shoppers spent 13.7% more in February than the same month in 2020. Jose Carvalho, head of consumer products at Barclaycard, said: “The nation is keen to make the most of life following the easing of Plan B restrictions, with many Brits still purchasing treats to give themselves a boost.”
House prices rise at fastest annual pace since 2007
House prices increased at the fastest annual pace since 2007 in February to hit a new record high. Halifax said that at 10.8%, the annual rate of house price growth was the strongest since June 2007. The increase took the average house price across the UK to a new record high of £278,123. Property values increased by 0.5% month-on-month. Russell Galley, managing director, Halifax, said a lack of supply continues to underpin rising house prices. He continued: “Looking ahead, as Covid moves into an endemic phase and almost all domestic restrictions are removed, geopolitical events expose the UK to new sources of uncertainty.” The average house price in the West Midlands in February was £234,481 – an annual increase of 9.7%.
Greggs
Greggs full-year sales have surpassed pre-pandemic levels, as the bakery chain restarts its colleague profit-sharing scheme, which will see £16.6m shared with staff. Total sales rose 5.3% to £1.2bn, in comparison with 2019’s figure of £1.1bn, preliminary results for the year to 1 January revealed this morning.
Dominos
Domino’s Pizza said this morning 2021 was a “transformational year” for the company, as it reported a 12.5% increase in profit. In the year ended 26 December, the group registered an 11% increase in revenue, going from £505.1m to £560.8m, while its underlying EBITDA increased from £125.5m to £136.4m.
Gas
Russia threatened to cut natural gas supplies to Europe via the Nord Stream 1 pipeline in response to sanctions imposed over the invasion of Ukraine. Europe has said it wants to reduce its reliance on Russian gas by 80% this year.
Markets
US stocks were hammered again overnight and selling continues in Asia. But major currency pairs and crosses are trading in tight range. Overnight, DOW dropped -2.37%. S&P 500 dropped -2.95%. NASDAQ dropped -3.62%.
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 nsm@cpa.co.uk 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 debtpurchase@cpa.co.uk 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
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.