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.
late payment culture
The investment in the small business sector has fallen, according to the latest Federation of Small Business (FSB) research. The number of small businesses that are planning to invest in the future of their business in the upcoming months, has decreased. This decrease hitting an 18-month high.
Keeping on top of your finances is one of the biggest causes of stress for small business owners, as the financial position of a business can really be the make or break point for the future of it. There are many challenges that small business owners face, from building a customer base to being a supervisor or creating and delivering good quality products. As a business owner, you will need to wear multiple hats in order to keep the business running. However, managing your finances may be of particular importance to the livelihood of your small business.
The late payment culture in the UK has been plaguing the livelihood of small businesses and causing severe financial strains. The federation of small business (FSB) is urging for more effective policies from the Prompt Payment Code (PPC) which has failed small businesses in the past. The demise of Carillion has effected thousands of people and many businesses that it owed money to.
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.