New research has revealed 37% of small businesses owners have considered closing their company because of cash flow issues caused by late payments.
The findings highlight the scale of the late payments challenge facing British small businesses, who are owed an average of £23,360 in overdue invoices on any one day and have to wait on average 14 days after the due date to be paid.
The research, by accounting software Xero, showed that the amount owed to small businesses in late payments on any given day in February 2019, was up 17% from the year before, demonstrating the startling growth in tardy payment practices.
At Premier Tax Solutions, we are a Xero Gold partner and are fully behind the campaign to highlight slow payment for smaller businesses, said Director Vanessa Fuller.
“The impact of late payments has a damaging effect across the whole UK economy as, on average in any given month, 48% of invoices issued by small businesses are paid late, and as a result a quarter of small business owners struggle to pay their own suppliers on time.
“Clearly, this has a direct impact on a company’s viability and cash flow, but late payments also negatively impact small business owners’ lives outside work. The research shows that over the last 12 months, over half have used personal savings or borrowed from friends and family to keep their business alive, while a quarter said they would enjoy better physical health if late payments were no longer an issue.”
“Over two fifths said that late payments caused them sleepless nights and affected their mental health.”
Vanessa also welcomed a recent initiative in which Xero has teamed up with PayPal to help make it easier for customers to pay invoices. By adding PayPal as a payment option to an invoice, customers can get paid up to 21 days faster using their PayPal account or credit card.
If you’d like help with getting paid faster we can help you to set up payment systems that link with Xero that can take payments for you and can even build credit control into the process. For more information call us on 01782 479699.