We were fortunate to be able to catch up with the founder and CEO of Chaser – David Tuck last week and we spent some time discussing the blight of many small businesses late-payments and the effect it has on them and the wider business community.
It’s a common problem among small business owners, so much in fact that Xero in association with PayPal produced a report on the State of Late Payments which contained some interesting statistics including that 48% of invoices issued are paid past their due date, which are on average paid 14 days late.
What are the impacts of late payments to small businesses?
For many business owners, reducing stress is a key component of better mental wellbeing, if business owners can implement processes and or solutions to help them better manage cash collection then that surely is a positive step forward.
With around 50,000 businesses each year failing due to cash flow issues, this is a key challenge for small business owners, who in turn pay suppliers late, struggle to meet staff payroll commitments as well as fuel growth and ambition.
So what can small business owners do to combat late payments?
Review your payment terms; Don’t automatically default to offering 30-day payment terms, if you can start with 0 Days terms and work up from there, ideally, 7-14 days. Yes, there will always be exceptions to the rule, buts they are exceptions.
Send polite reminders to your clients before, and after the invoice is due. Xero has some really simple features to help you do this or you could choose to implement automated software from Chaser to take this to the next level.
You can also speak to us about our virtual credit control service and get complete peace of mind knowing that your debtors are being dealt with on your behalf.
We also grabbed a lengthier discussion with David on our podcast, which you can also listen to here.
If you have any questions on how you can improve your cash flow or reduce your late payments – give us a call on 01207 502 145 or drop us an email to email@example.com