Late payments are continuing to cause substantial issues for small businesses according to new research. The latest data from tomato pay, a QR-code payment and invoicing app, shows that 84% of small businesses are suffering from late payments.
One in eight companies are waiting on average more than 60 days for invoices to be paid, with one in 50 waiting over 90 days.
This is putting a huge strain on small business owners. 92% of those questioned said it was having a negative effect on either their business, their personal life, or both. Over a third said it causes cash flow issues and stress for their business and 16% receive late payment charges themselves because they are unable to pay their suppliers on time.
The problem of late payments means that a third of small business owners have ended up paying themselves late, or not at all. 17% have paid employees late because of the cash flow issues it has caused.
Receiving late payments from customers is also impacting on businesses growth prospects, with a quarter saying it’s limiting their ability to grow. A fifth of small businesses are concerned about their company surviving because of the number of invoices that are paid late.
tomato pay’s founder and CEO Nicholas Heller said: “On average, small businesses issue 122 invoices every month – that is a whole lot of admin. Then, when you consider the fact so many are paid late – which causes stress, cash flow issues and jeopardises the business’ survival – it is clear to see why the process of creating and issuing invoices can be so frustrating for small business owners. They just want to get paid on time – that shouldn’t be too much to ask.”
Resolving the problem of late payments
The research from tomato also questioned small business owners on what would help discourage late payments. 54% of those surveyed said they would be happy to provide discounts to customers who pay on time or early and 69% would like to use an invoicing software package that could send automatic reminders.
This survey also highlighted that small businesses are frustrated by how long financial administration takes. Nearly half said that creating invoices feels like ‘the wrong use of their time’ and 55% believe they’d grow the business faster if they could spend less time on financial aspects of the company.
Helping small businesses with late payments
At CEA Limited we are dedicated to providing a quick and effective means for small businesses to collect their late paid invoices. Our professional in-house team offers a range of financial solutions, including outsourced credit control, debt recovery and enforcement action.
Take the stress out of your unpaid invoices and contact us today to find out more. Call on 0845 643 0635 or email office@cealimited.co.uk.
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