With the evolution of financial technology, international money transfers are now easier, faster, and more secure. One thing that hasn’t changed, however, is that these international transfers still come at a steep price.
Small Business Payments
A recent Government report shows that £44.6 billion is owed to small-to-medium sized businesses in late invoice payments. While it’s hard to fathom how much impact this amount of money will have on the economy in general, it’s important to understand the impact it can cause business owners.
Good invoicing is vital for freelancers and anyone running a micro/small business. Sending out well-designed, concise invoices is important to get you paid. It will make it easy for your clients to pay you, that way you’re much more likely to get paid on time. The last thing you want to do is spend all of your time chasing unpaid invoices.
If you’ve already followed the standard procedures for recovering an unpaid invoice, you may be considering more drastic actions. Unpaid invoices are a common problem for SMEs and can cause significant financial burdens. Once 38 days have passed since the invoice due date, you have four options for debt recovery given by Sage.
Late payment is a fact of life for many businesses but for many SMEs it can prove to be a constant battle to get paid on time. But it doesn’t have to be that way as small businesses now have more options for taking the leg work out of their credit control than ever before.
Whether you work for yourself or run a small business, the most difficult thing to manage is cash flow. So, what can you do if you are owed money and the person is ignoring all your phone calls and letters? Firstly, don’t panic! Late payments has become part of the small business culture, but there may be some who try to evade making payments. This is when you will need to look at the debt collection, and really take what is yours.
Your new business may have a promising product and high-value clients, but if they don’t pay for your goods and services, then your venture could quickly fail. Therefore managing your small business invoicing is a vital part of running any business. Having a comprehensive understanding of what needs to be included in an invoice and common billing mistakes can also benefit your cash flow.
The new Small Business Commissioner, Paul Uppal is driving the change that needs to take place, regarding small businesses being paid late. Larger businesses and companies unfair treatment of small businesses, and the culture that has become a norm can really have detrimental effect on small businesses. Therefore, when the Small Business Commissioner was appointed earlier this year, one of the major issues that he said he would deal with was the late payments problem.
Late payment is one of the leading causes of business failure. When the cash stops flowing, many firms – even successful ones – could be forced out of business. Keeping on top of your cash flow should be a priority for all business owners.
When is the last time you updated your invoice template? If you haven’t looked at the details of your invoices in a while, it’s a great time to check that you’re meeting all of your legal requirements and helping your invoice stand out from the crowd.
A stop list is a powerful tool for all limited company owners, and a simple way to protect yourself against carrying out further work for non-paying clients.
The Late Payments of Commercial Debts (Interest) Act 1998 was originally devised as a way of ensuring small businesses are not left out of pocket by late payments, and sets out the entitlement to charge a statutory rate of interest on any overdue invoices.
For companies frustrated by persistent late payment problems, invoice financing can provide a useful way of freeing up the value of their outstanding invoices.