Close

Choose a country

United KingdomEnglish
South AfricaEnglish
IndiaEnglish
InternationalEnglish

The Late Payments Epidemic

Blog
13th January 2017

 

late payments, smes

Outstanding invoices are a nightmare for any company. Business leaders already have to manage clients, ensure delivery and make consistent sales – adding late payments into the equation increases the burden on both your team and your business.

Many companies collapse each year under the strain of trying to manage their cashflow. They need to pay for services on time, but their clients happily let invoices sit in their accounts department for months before releasing payments. Recent research by the Zurich SME Risk Index suggests that 53% of small to medium-sized enterprises (SMEs) in the UK are currently owed money as a result of late payments. This adds up to about £255bn that should be with smaller companies, but is instead just sitting in the bank accounts of their clients. Zurich estimates that around 20% of companies are owed over £20,000, and around 8% are owed over £100,000.

Late Payments Worldwide

Payment behaviour is different across the world, and often dependent on the prevailing interest rates in that region. For example, in Japan most companies pay earlier than required. With rates at zero to negative, there is no incentive to keep cash in the bank. Although Brazil, in contrast, has relatively high interest rates but a culture of naming payment dates on invoices so the client and supplier both have an expectation of the exact payment date – rather than the more vague 30-90 days we are used to in the UK.

The UK government has attempted to address the culture of late payments with several measures. They have forced large companies to openly publish their payment practices and how they are performing on average against their planned payment schedules. In addition, a small business commissioner position is in the process of being created. This commissioner will have the power to chase offenders directly and to try influencing further policy changes.

However, back in the real world it can be difficult to manage late payments and despite the efforts of the government to improve the general business environment in the UK, if you have open invoices now then you need to get paid. There are numerous professional bodies out there that can help – until vast change takes place in global payment culture, they are the best hope for many businesses.

What are your experiences with late payments? Leave a comment below and let me know, or get in touch on LinkedIn.


Leave a Reply

Your email address will not be published.Required fields are marked *


David Turner
Article by: David Turner

News & Insights

Recommended for you
Solution Designer
Service Provider
Technology Enabler
News
Webhelp group agrees to acquire Sellbytel in transformational transaction

Acquisition strengthens Webhelp’s position in the European CRM BPO Market   Webhelp Group, a leading global BPO and customer experience company, today announced that it has entered into an agreement to acquire 100% of Sellbytel Group. Sellbytel is a wholly-owned subsidiary of Omnicom Group Inc. (NYSE: OMC). By joining forces with Sellbytel, Webhelp expands its geographic footprint...

Blog
International B2B e-commerce: 5 pitfalls and 5 good practices

Increasing numbers of B2B businesses both large and small are setting their sights on trading internationally through an e-commerce platform. To give yourself the best chance of making a decent fist of it, Axel Mouquet, Development Director of Webhelp Payment Services, proffers his advice and...

News
Webhelp Payment Services wins a Mirakl Partner Awards

Webhelp Payment Services has been awarded « ISV Partner of the Year » at the Marketplace&Platform Summit by Mirakl, which took place this June 7th in Paris. This award is shared with our German client, Conrad Electronics, and their amazing B2B Marketplace Project. We have produced this...

Whitepaper
TECHNOLOGY IN THE TRAVEL SECTOR

How often are travellers using digital methods? What channels are customers using most frequently? And has the internet, as many predicated, replaced the traditional travel agent?   The Travel Industry is one sector that many people believed would be disrupted the most following the...

Case Studies
Webhelp People Analytics

...

×

Webhelp Cookies Preference Centre

Strictly Necessary Cookies
The website requires the use of cookies for essential functional requirements and these are outlined in the terms and conditions.

Enhanced Functional Cookies
Some features of this website use services provided by third parties websites. These features use cookies to implement their services on this website and may collect data about your visit to help them optimize their functionality. The Webhelp terms and contitions outlines the cookies used by these services.

We have links to social networking such as Twitter, Facebook and LinkedIn.
These websites are third party sites. We do not place cookies on their behalf, and do not have control over the way they collect or use your data.
We encourage you to read more about their policies:
Twitter
LinkedIn
Facebook