Britain’s small businesses are sick of chasing payments with 64% of invoices paid late. And it’s costing them time too – they’re spending 10% of their day chasing invoices. It’s just not acceptable.
We’re taking action to raise awareness of the issue. We’ll discuss the effect of late payments on small businesses and their cash flow, reveal the results of our own research into the extent and impact of late payments, and celebrate the country’s prompt payers.
Read about late payments and see what you can do to beat it at chasingpayments.com
What our research has shown
Our investigation into late payments revealed that small business owners are spending an average of 10% of their day – which equates to two days per month – chasing late payments, with invoices an average of 14 days overdue before being settled.
That’s a lot of wasted time, and it can have a significant impact on cashflow. But there are solutions out there to help small business owners avoid the same fate as 65% of businesses that failed due to financial issues. We have some simple advice to share with you on how to turn this problem around.
What can be done about it
Gary Turner, UK managing director, has the following tips for small business owners, to avoid late payments and improve cashflow:
1. Invoice promptly: The sooner you invoice, the sooner you’ll receive payment. It’s vital to get your invoicing process right from the start so that it is efficient and pain-free.
2. Establish a relationship: Introducing yourself to the people in the accounts departments of the companies you are invoicing can often make a difference. At the same time, ask them to include your invoice number as a reference with every payment they make, to help you determine which invoice is being paid.
3. Keep accurate records: Keep track of the time and materials expended on a client’s project and make sure you invoice for everything. If you record the work done as you go, it saves you trying to remember the details at a later date.
4. Define your payment terms: Consider shortening your invoice payment period to encourage your customers to pay sooner, even to one or two weeks. If you make your best efforts to supply your products and services to your clients’ deadlines, there’s no reason why they shouldn’t try their best to pay you just as quickly.
5. Make it easy to get paid: As a general rule, when you make it easier for your customers to pay, they’ll pay sooner. Some accounting software offers a ‘pay now’ button on digital invoices, which means you can send customers invoices online with the option of getting paid instantly. Also, automated invoice-chasing apps, like Chaser, integrate with your accounting software and do it for you.
It’s time to change the way businesses deal with invoice payment. Visit chasingpayments.com to find out more.