Survey reveals effects of late payments
The views of 500 small businesses in the UK were explored in the survey, with shocking results. 53% of construction companies labelled late payments a significant problem, with 69% admitting it caused them to pay their own suppliers late. In worse cases, which affected 31% of those questioned, late payments had lead to them almost going out of business.
Graydon UK suggested the research emphasised the importance of credit control procedures, with those businesses following guidelines of some form less likely to suffer as a result of late payment. It was found that only 44% used formal credit control procedures, 38% used a mix of formal and informal processes and 16% used credit control as and when required.
FPB chief executive Phil Orford said: “The research shows just how damaging the late payment of invoices is for small firms across every sector. It decimates cash flow, kills growth and innovation and ultimately forces businesses to the wall.
“We need to do two important things – first, communicate to business owners exactly what they can do proactively to minimise late payment, including putting in place robust cash flow management procedures and even simply invoicing properly and on time, then we need to provide the support and services they need to make tackling late payment a standardised business process.
“Second, we need to persuade large corporations to embrace paying their suppliers on time and in full, avoiding the temptation to impose damaging, retrospective changes to terms and conditions, so that prompt, proper payment washes down the supply chain.
“These are the aims that are squarely in our sights and we are committed to working with the government and other agencies in order to achieve them.”