Businesses are missing out
Research from the Federation of Small Businesses has shown that the impact of late payments on SME’s and the self employed are crushing. Their research has shown that the issue causes more than 35% of small businesses to run into cashflow difficulties whilst more than 30% have been forced to use their overdraft facilities.
At the more extreme end of situations, the cashflow issues can cause businesses to fail. The FSB estimates that this issue has caused more than 50,000 businesses to close annually.
Despite most small businesses being savvy about cashflow, the majority of late payments (84%) to small businesses and the self-employed are more than two weeks late, with an average delay of about six weeks. It’s worth being aware that large businesses are the most likely to pay late – 61% of late payments are from large private firms.
Regency have found that late payments have caused our clients to use our facilities on an increasing basis. We have been able to support clients through hard times, allowing them to concentrate on their business, not just their cashflow as clients know that they will receive payments for their invoices immediately, allowing growth.