Quarter of SMEs constantly chasing late payments – business news 18 March 2021.

James Salmon, Operations Director.

A quarter of SMEs constantly chasing late payments, experts urge BoE not to shift policy, vaccine key to unlocking consumer spending, audit shakeup, tax day and more.

Quarter of SMEs constantly chasing late payments

26% of UK SMEs have said poor cashflow is their biggest financial concern of the pandemic, according to The Business Challenges report, carried out by card payments company Takepayments.

They found that these businesses are constantly chasing late payments during the pandemic.

“It is concerning that one in four business owners are finding themselves constantly chasing up late payments. It’s not only time consuming for them but it also has a worrying impact on them,” said Sandra Rowley at Takepayments.

Businesses within the insurance and pensions sector (46%) and charity and voluntary sector (42%) are the most fearful of late payments, with nearly half expecting to chase late payment of invoices throughout the year.

The report also said there is also across the board concern on the impact Brexit will have on cash-flow, with 21% of small business owners worried about it.

More than one in 10 (15%) businesses say financial challenges will be their biggest concern for the year ahead thanks to the economic crisis brought by the pandemic, and subsequent UK lock-downs.

Almost half (49%) of SMEs predict their business will make a loss or break even in the year ahead.

Businesses within the performing arts (33%), healthcare (32%), creative arts and design (26%), and hospitality and events management (26%) sectors are those most likely to make a loss this year.

Despite the government extending the furlough scheme to help reduce the number of unemployment in the UK and support UK businesses owners, three in ten (30%) admit they have already had to let staff go.

The report also revealed potential credit management skills gap in small businesses, with almost one fifth (18%) of business owners and senior decision-makers describing their knowledge of invoicing as ‘limited’ and 19% stating they were not confident using online banking for their business.

A recent survey of 1,100 businesses showed that only 28%of SMEs have enough cash for the next 12 months. The use of bank loans by SME’s was up 82% to £104 billion last year.

In summary, SME’s are short of cash, are not getting paid by their customers and lack the credit management skills to navigate out of it.

If this describes you, then seek help from credit management professionals, like those at CPA.  We have been helping businesses get paid for over 100 years and through our unique late payment compensation service, we have been using late payment legislation to help distressed SME’s get compensated for late payments in years passed by former business customers (see below).

Call 020 8846 0000 today and find out how much compensation you could be due!

Experts urge BoE not to shift policy

A panel of leading economists have voiced a belief that the Bank of England (BoE) should leave policy unchanged when it announces its latest monetary policy decisions today. All nine members of the Times’ shadow monetary policy committee, a panel of former central bankers and economists, recommended the Bank holds off taking any action until a clearer picture of the economic climate emerges.

Analysts expect the Bank to hold interest rates at 0.1% and leave quantitative easing at £895bn. Reflecting on BoE chief economist Andy Haldane’s suggestion that the economy is a “coiled spring”, Sir John Gieve, a former deputy governor at the Bank, said that “inflation may be about to wake up”.

Bronwyn Curtis, non-executive director at the Office for Budget Responsibility, adds: “Any coiled spring recovery will be temporary”, while Sir Steve Robson, a former Treasury mandarin, said he was “not entirely convinced” by the coiled spring, suggesting that the unpredictability of COVID-19 “may lead a lot of people to be quite cautious”.

Vaccine key to unlocking consumer spending

Research by EY points to “significant pent-up demand for consumer spending post-pandemic”. However, with 55% of people polled as part of EY’s future consumer index saying COVID-19 will only stop affecting their lives after most people are vaccinated, the firm said it suggests “the big unlock in consumer behaviour will come later in the summer rather than when non-essential stores open on April 12.”


Ocado Retail, the joint venture between Ocado Group and Marks & Spencer, has seem a 40% growth in revenue in the 13 weeks to 28 February 2021. Retail revenue grew from £428.8 million in the 13 weeks to March 1, 2020, to £599 million in the first quarter of 2021. M&S products consistently accounted for more than 25% of the average basket.

National Express

National Express has reported a 28.7% fall in group revenue for 2020, in spite of a strong start to the year that saw a near 20% revenue rise. The company reduced its net debt by £400 million to £941.6 million and won new contracts across all divisions, including a first entry into Portugal, to the tune of £900 million.

Government consultation outlines audit shake-up

The Government has said the Financial Reporting Council should be replaced by the Audit, Reporting and Governance Authority (ARGA), with the new regulator to be given legal powers to improve the quality and standards of the auditing profession.

Officials have launched a consultation that will deliver rules designed to help avoid company collapses and ensure auditors uncover problems sooner. The proposals include plans to break up the dominance of the Big Four to avoid conflicts of interest. This could see large businesses required to use smaller auditor firms to conduct part of their annual audit. Large companies will also face greater scrutiny from regulators, with tougher penalties for individual company directors where serious failings occur, with it to be made easier to claw back bonuses paid to executives of failed companies.

The consultation accepts the vast majority of recommendations made by reviews into auditing and corporate reporting by Sir Donald Brydon, Sir John Kingman and the Competition and Markets Authority. Business Secretary Kwasi Kwarteng said a series of high-profile corporate collapses show that “Britain’s audit regime needs to be modernised with a package of sensible, proportionate reforms.”

Shadow Business Secretary Ed Miliband welcomed some of the measures but suggested there are “real questions about whether this package is sufficient to reform the broken audit market”. He said it is “regrettable” that the package “waters down” some of the independent recommendations made in regard to competition in the sector, including on mandatory joint audits between the Big Four and challenger firms.

Welcoming the reform, the ICAEW said the establishment of ARGA should be the top priority, with chief executive Michael Izza adding that he would like to see “the reform agenda taken forward with some pace”.

What to expect from tax day

With the Treasury set to detail consultations on future tax policies on 23 March attention has turned to what “tax day” may bring. While much of the focus is expected to be on technical administration of the tax system, the Chancellor may also “lay the groundwork” for possible tax changes that could come after April 2022.

Nimesh Shah of Blick Rothernberg is preparing for “significant” announcements that were delayed because of the latest coronavirus lockdown, saying he expects tax day to “give a real insight into Rishi Sunak’s intentions.” On the changes Mr Sunak could outline, reform of the capital gains tax system is possible, while Richard Wild of the Chartered Institute of Taxation says he expects to see changes to Business Assets Disposal Relief which discounts CGT for people selling shares in their own firms.

With it suggested that the lower rates of National Insurance paid by the self-employed could be reviewed, BDO’s Paul Falvey said it is likely the Government will look to more closely align the tax treatment of the self-employed and employees in the coming years. Changes to property tax may be on the cards, with business rates potentially in line to be reformed or replaced.

Firms miss target for women in senior roles amid pandemic

The fourth annual review from think-tank New Financial says the Women in Finance Charter faced its biggest test yet after the coronavirus pandemic struck in 2020. Over 70% of the 209 signatories, including the Treasury, have met their self-imposed targets, or were on track to meet future targets. The review shows that 35% of signatories have met their target and 36% are on track to meet the future deadlines they have set themselves. Just over 60% of the signatories have set a target of at least 33% of female representation in senior management. According to the review, a group of 81 firms were due to hit their target by the end of 2020, but 44 of them failed to do so, citing deliberately ambitious targets, as well as recruitment or promotion freezes due to the pandemic. Among those who missed the target were the Financial Conduct Authority, which set itself a target of 45%; the Financial Reporting Council, which set a goal of 33%; and the Bank of England, which had aimed for 35%.

UK 12th on house price increase index

The UK has placed 12th in estate agent Knight Frank’s global index of house price increases, with the average value of UK homes climbing 8.5% in 2020. Turkey topped the rankings, having seen property prices surge by almost a third last year. It saw a consistent increase in values in 2020, leading the index for four consecutive quarters. It was followed by New Zealand, where prices went up by nearly 19% last year, and Slovakia, where values climbed 16%. The UK’s 8.5% price growth saw it outdo several European neighbours, including Germany (7.8%), France (6.4%) and Ireland (2.2%). Spain was among the worst-performing countries, with typical prices down 1.8%. Of the six countries in the index which saw house prices decline, India saw the steepest fall at 3.6%. Overall, prices across the globe increased 5.6% on average in 2020, up from 5.3% in 2019.

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

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.