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15 Apr 2009
As many as 1.2m UK businesses are being affected by late payments, according to Tenon Recovery.
The mid-tier firm surveyed more than 1200 business owners and senior managers in compiling the research which shows three in five businesses are affected, and its now urging businesses to adopt a responsible attitude towards payments.
35% of businesses surveyed estimate that late payments cost them in excess of £10,000 a year both in terms of bank charges and the administrative costs of chasing payments.
Tenon estimates the average amount owed in late payments to have risen by a
third in 2008, taking the average amount owed by UK companies to around £40,000.
Carl Jackson, national head of Tenon Recovery, said managing cashflow is
fundamental to a business' survival in the current economic climate and late
payments forms part of this.
'More than ever, businesses must adopt a responsible attitude towards late payments to avoid the domino effect of business collapses that late payments can cause. This means not only making payments on time to avoid causing problems, but having clear payment terms, credit control procedures and chasing slow-paying customers,' he said.
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Briefings
By looking at the reasons supplier statements became unfashionable, and the reasons why it is different today, this paper delves into the many benefits that can be obtained by automating the process.
Having a real and true view of your organisation’s current financial position, and having the right systems and processes in place, will ensure that you can make strong choices and are ready to capitalise on opportunities
AccountancyAgeInsight is a frequently updated resource centre for finance professionals, offering a free and easy-to-use digital library of briefings, white papers and other information resources. 
Visitor comments Add your comment
SME owners clearly need to address financial processes
SME owners clearly need to address financial processes ? the gulf between those with healthy cash flow and those sweating over debt is a paper versus electronic payment issue. The roll-out of Faster Payments, allowing almost ?real time? electronic funds transfers (EFT), will widen that gulf even further if businesses don?t adopt an IT solution now.
The cost of processing a cheque is around ten times that of an EFT, with longer clearing times at the bank making a late payment even later and causing cash flow issues for both parties concerned.
Electronic payments save so much time and resource ? it?s difficult to understand why any SME would choose to receive cheque payments. Investing in simple software allows businesses to set up secure, validated EFTs. Business owners can take control of when they are paid; they don?t need to rely on customers to pay on time because the software does it for them. Who can afford to spend 38 days a year just chasing late payments of £30,000 when overdue invoices of just £20,000 can cause bankruptcy?
This is the twenty-first century and yet the Bacs research shows astonishing numbers of SME owners are still entrenched in using unnecessary, archaic processes that could cost them their businesses.
Yours sincerely,
Adrian Stafford-Jones
Managing Director
Albany Software
www.albany.co.uk
Posted by: Adrian Stafford-Jones, 16 Apr 2009 | 00:00