We’ve all been there – the waiting game for a client’s payment, followed by the tedious string of excuses or complete silence. It’s a recurring issue, with recent studies indicating that 43% of invoices dispatched in the last year by UK-based SMEs and freelancers faced delays. At Bedford Accountants, we understand how crucial prompt payments are. Here’s how we view the situation and what you can do to mitigate late payments.
The Ripple Effects of Delayed Payments on SMEs Delayed payments might seem trivial occasionally, but imagine facing it consistently! SMEs anticipate maintaining a positive cashflow throughout the year. However, frequent payment delays can disrupt this balance, resulting in potential financial constraints and even an inability to clear their own dues. The time spent chasing these payments is time taken away from business growth.
Addressing Late Payments: What Can Businesses Do? There’s a clear outcry from SME owners urging the government to take more robust measures against this issue. Here are some pragmatic steps to minimise late payments:
• Get acquainted with rules on levying interest or fees for delayed invoices.
• Clearly articulate the implications of delayed payments in all agreements.
• Implement automation for tracking and reminding clients of due payments.
• Simplify the payment process for clients, perhaps by integrating a direct payment link in your invoices.
• Offer flexible payment plans for clients navigating their own cashflow hurdles.
• Remember, legal action is an option for customers who consistently dodge payments.
Eager to explore how you might streamline your payment processes? We would love to help support you with this, we are an experienced, friendly and approachable team, get in touch.