28 August, 2020
Recent research by accountancy firm Moore has shown that the average waiting time for payment of supplier invoices is 41 days, the same as it was in 2015. Staggeringly, over 17,000 businesses involved in the study are having to wait 90 days or longer to receive payment of money that they are owed.
Despite businesses crying out for further legislation in an effort to improve payment practices and more importantly, reduce the late payment that is crippling small to medium enterprises in the UK on a daily basis, we are still no closer to a change in procedure.
Further, with the full effect of coronavirus on the UK economy still yet unknown, it is expected that late payment is likely to get worse over the coming months. Some businesses are already using the excuse of an economic slowdown in an effort to delay payments even longer.
However, late payment is not only a result of the coronavirus pandemic, it is its own epidemic that has plagued UK businesses for many years. In the 12 months ending Q1 2020, the construction industry had the highest number of new company insolvencies with 3,077, with late payment being one of the problems that advances the sector's alarmingly high rate of insolvency.
Slow payment restricts cash flow and many businesses write off unpaid invoices as bad debts even when they cannot afford to do so, having a detrimental impact on many SME's and forcing them to go bust as they are unable to meet their own upcoming costs due to the backlog of unpaid invoices.
We always recommend taking a proactive approach rather than reactive when it comes to late payment and Forbes Collect are here to aid you in the collection of unpaid invoices in the most efficient and cost-effective way, taking the pressure off your business and resources whilst pursuing the debtor with the maximum amount of pressure. In turn, increases the likelihood of recovery and avoiding an unpaid debt becoming a bad debt.
For more information contact Sadie Butler in our Forbes Collect department via email or phone on 0333 207 9388. Alternatively send any question through to Forbes Solicitors via our online Contact Form.