Late payments cause cash flow problems and negatively impact the income of your business. In fact, late payments are the single biggest cause of business failure (1). How can you avoid finding yourself in this situation, especially during these unprecedented times?

With inflation at a 40-year high and employment challenges post-Brexit, it is no surprise that consumers and businesses are failing to make payments on time, if at all. Research by Barclays found that 26% of small or medium-sized enterprises have seen the number of late payments increase since the rise in the cost of living.

Why are people struggling to pay?

Whether you are a B2B company or a B2C, you’re likely to see more invoices go in the red as customers struggle to make payments on time. The rising cost of living, interest rates scaling, and pandemic loans to repay, are all factors in why previously on time paying customers have started to delay.

We know chasing invoices isn't the most exciting task on your list, and it takes you away from growing the business. Our commercial debt collection service is professional and maintains trading relationships, even in strained situations (2).

Keeping up with late payments and collecting money owed from debtors is an ideal way to keep cash moving through your business.

The impact of late payments on your business

Late payments aren’t only a time vacuum, they also cause problems within your own business. When you don’t have the cash flow it has a knock-on effect of making you less able to pay your suppliers.

Being in debt to your creditors isn’t an ideal position to be in and certainly not one to ignore. If speaking to your creditors is something that keeps slipping down your list, we can help. We can work with you and those you owe money to find a workable solution that won’t impact your relationship and will give creditors peace of mind (3).

Further to being unable to pay suppliers, cash flow issues prevent you from investing in the business or hiring more staff. The research found that 10% of SMEs asked said the amount they are owed in late payments could be used to recruit staff and 12% said they could use the money to expand their products or service.

Now is the time to find ways to salvage late payments and prevent the consequences they will have on your own business.