It’s universally acknowledged that late payments are bad for the health of a business. Cash is king and payment delays can leave businesses unable to pay existing debts or invest in future growth.
But I’ve found that it’s not just company financials that can suffer; shocking statistics highlight how late payments can negatively impact business owners’ lives and well-being outside of work too.
In the UK alone, it has been estimated that a staggering £44bn is owed to small and medium-sized enterprises in late payments[i], with UK Government statistics revealing that over 20% of business admit to paying more than half of their invoices late.
Add to this, the revelation that 77% of small business owners are reluctant to act against unpaid invoices for fear of damaging client relationships[ii], and it’s no surprise that cash flow worries are a leading cause of sleepless nights for many business owners.
By contrast, getting paid on time can have a dramatic effect on a small business owner’s happiness and ambitions. Over three quarters (76%) agree that having a business feels more ‘worth it’ when there aren’t cash flow problems and a quarter (26%) said they would enjoy better physical health if late payments were no longer an issue.[iii]
Getting the money you are owed, paid on time sounds simple, but the reality is that it can be difficult when processes are slow, confusing and stressful, not only for collections but for customers too.
- Automating routine tasks such as payment reminders and regular reporting frees up time to spend on more important issues.
- Delivering data to your fingertips, such as account look-ups and call logs provides instant access to call lists and customer information. After any customer contact, notes can be recorded and scheduled follow ups can be logged.
- 100% workflow visibility allows monitoring and forecasting of accounts receivable performance. Accurately predicting the likelihood of getting paid on every outstanding invoice gives the foresight to uncover and fix issues quickly.
- Customer portals provide access to instant, comprehensive support and an online payment facility whenever your customers need it.
Where manual processes fail, automation succeeds by ensuring a smooth experience for every stakeholder involved in the process.
If you’d like to learn more about how Esker can help you get paid faster, contact us email@example.com
[i] Zurich https://www.zurich.co.uk/en/about-us/media-centre/general-insurance-news/2017/smes-owed-more-than-45bn-in-late-payments
[ii] ‘Taking notice of UK business’ The Small Business Commissioner and Growth Street https://www.smallbusinesscommissioner.gov.uk/wp-content/uploads/2019/07/Growth-St-Survey-.pdf
[iii] The state of late payments – the effects on business and their owners – Xero https://www.xero.com/content/dam/xero/pdf/state-of-late-payments/State-of-late-payments_report_2019.pdf
*UK companies with a turnover of over £36 million have an obligation to notify the Government of their payment practices. However, with no penalties for failing to do so the number of companies reporting this information is limited. Government statistics show that 1,385 (20%) businesses paid more than half of their invoices late.