Late payments hit a new all-time high
Prompted by the revelation from Bacs, the organisation behind Direct Debit, that the late payment debt mountain being shouldered by UK businesses has reached £46.1bn, Luisa Grey, a director at Eazipay Ltd, said: “Another year of missed opportunities as the amount of money that companies owe each other grows higher and higher.
“It is astonishing that the government, once again, seems to be passively standing to one side, saying some of the right things, but actually taking no positive action whatsoever.”
With 60% of UK small to medium size businesses experiencing late payments and the average debt standing at just over £38,000, Luisa is fearful that a culture of simply not paying for goods and services received will become the norm rather than being seen as an unacceptable abuse which needs to be driven out.
Luisa continued: “Late payments are corrosive. They attack the very heart of companies depriving them of essential cashflow, depriving them of the opportunity to grow and depriving them of investment cash.
“The late payment culprits are everywhere, from large corporate companies to government departments to small enterprises who are unable to pay their small suppliers because they are not being paid.
“The sad irony is that the money is there to wipe out this this debt mountain as at the last count UK businesses were sat on cash reserves totalling some £745bn.
“In the meantime, while we are waiting for government to wake up and pay more than lip service to this national scandal, companies should take extra measures to protect themselves from the scourge of late payments by using Direct Debit to collect money owed to them. They could perhaps consider offering discounts for timely payment or be willing to accept stage payments.
“There is a general election on the horizon, let’s hope that when we have a new government that it is more business friendly than the current one.”
Eazipay, which is based in Littleport, Cambridge provides regular Direct Debit collection and processing services to thousands of SMEs and corporate organisations in a wide range of market sectors throughout the UK, Europe and beyond.
In 2013, the company recorded its best ever year for Direct Debit collections when over £235m worth of Direct Debits were processed on behalf of its clients.
