UK Small Businesses Owed £39.4bn in Late Payments
Most small and medium-sized enterprises (SMEs) in the UK know all too well the problems late payments cause. However, new research from Bacs stating that this year UK SMEs are owed £39.4bn in overdue bills, really puts the severity of the problem into stark perspective.
With many small businesses spending more than 10 hours per week pursuing late payments and others forced into bankruptcy, it’s clear that something needs to change. The UK Government have promised measures to improve the situation; but should SMEs be patient and wait for these measures to be introduced and take effect? Perhaps not the best advice when you consider that measures introduced in the previous year (when the figure owed was a mere £30bn) obviously failed. The problem is clearly getting worse rather than better.
If you compare the figure owed to large businesses (only £6.7bn), it demonstrates that SMEs do not have the same capacity or power to collect payments on time as the big guys. However, there are options open to SMEs. One of the best methods to cut down on late payments and improve cash flow is to collect payments with Direct Debit.
As a Bacs Approved Direct Debit bureau, SmartDebit is patently aware of the problem facing SMEs and we know that Direct Debit ensures businesses can collect payments from their customers on time, every time. Direct Debit allows SMEs the flexibility to set up recurring payments, the ability to change the payment amount and frequency without having to re-bill the customer. This makes Direct Debit an obvious choice for businesses that need to improve cash flow and also has the additional benefit of saving valuable time spent chasing up payments. It’s also one of the key ways that many large businesses manage their cash flow so effectively.
SMEs who have previously tried to collect payments using Direct Debit by applying for their own Service User Number (SUN) from their bank may have been turned down. Not to worry. With SmartDebit’s Facilities-Managed Service, everything is taken care of for you, including set up, processing and crediting funds into your account. We provide a complete Direct Debit solution to ensure we get your cash flow back on track and help your business to grow.
Contact a SmartDebit advisor today on 01276 851 800 to see how we can help your business improve cash flow.