Read the latest news about alternative business finance.
A new law for businesses reporting payments has been introduced this April with the intention to boost transparency of payments from large businesses to SMEs. Twice a year, larger businesses now need to report how they pay small businesses and the average time they take to pay. Recent figures show SMEs are owed £26.3 billion in overdue payments and almost a quarter admit they usually receive payment for invoices late.
Small Business Minister, Margot James, says: “It’s completely unacceptable that small and medium-sized businesses are owed £26.3 billion in late payments, which hampers their ability to grow and has no place in an economy that works for all.”
Many small businesses have said they don’t feel the late payment crisis will be solved by the new law. A mere 17% of decision makers from British SMEs think that the “duty to report” will have a positive impact upon their business.
If you have fallen short due to late payments, we have put together a few tips to help you overcome this.
Offer incentives or discounts
You can consider offering incentives or discounts for clients and customers that pay their invoices early. The incentive you offer will obviously be dependent on the type of your business but this can be introduced to motivate your clients into paying promptly.
Make your payment terms clear
This sounds like an obvious point but you need to make sure that your payment terms are clear from day one. Make sure that you include them on your agreements and they are clearly visible on your invoices.
You can set up automated email responses to remind customers of when payments are overdue. By automating the responses, you can minimise the time you spend chasing payments but also the time you waste waiting for them.
Business cash advance facility
Quick Capital provide a cash advance for small businesses who accept card payments from their customers. If your business takes over £500 per month in card payments, you could be eligible for a quick and simple cash injection to overcome obstacles such as late payment of invoices. This could give the boost your business needs to invest and grow.
Talk to one of our advisors about how our small business cash advance facility can help by calling 0800 3777 402 or visit www.quickcapital.co.uk