Late Payment Warning from the Small Business Commissioner
In a recent podcast, The Small Business Commissioner, Liz Barclay, issued a warning that without confidence in cash flow, the UK’s small and micro businesses would be restricted from investing in new jobs, equipment and training or risk shutting shop.
During the conversation with Saltare CEO, Anthony Persse, Liz Barclay raised the issue of late payments hindering small and micro businesses, because often they are forced to stretch funds if invoices are delayed or paid late. This has a knock-on effect in cutting budgets for new staff or research and development.
“If we look economically, small businesses are put at risk and cannot manage their cash flow if they do not have payment certainty or know when payments will be made. This means they either must stretch their funds or look elsewhere for funding, and this limits their investments not just in business growth but business-as-usual functions.”
In addition to the strain late payment puts on business owners’ books, Liz also raised the issue of the mental health challenges business owners face through not having sufficient cash.
Areas of focus for Liz are freelancers, sole traders and micro businesses. She believes these individuals and owners are most at risk of struggling with mental health challenges and sleepless nights, due to an unpaid invoice putting their livelihood at risk.
There is drive for business leaders and policymakers in the UK to prioritise paying on time. Early payment and the certainty of payment eases cash flow concerns and improves the likelihood of future success and growth. Whilst on the other hand, poor cash flow and poor payment practices ultimately leads to business failure and insolvency.
The message from Sintons debt recovery team has always been to focus on your credit control and deal with any late payment of invoices promptly and robustly, wherever possible. You have the best chance of recovering what is owed to you the sooner you chase.
If you have any queries about this article, please contact Allison Thompson on 0191 2267878