ATTENTION BUSINESS OWNERS!!! £1.9 BILLION A YEAR WASTED CHASING LATE PAYMENT

• 1.68 million (35%)of businesses finding customers are taking longer to pay than 12 months ago
• 48,000 businesses chasing invoices more than 11 times
• 336,000 (7%) businesses spending three days or more per month chasing payment
 UK businesses are pouring money down the drain chasing late payment and this could be costing the small business community as much as £1.9 billion a year.
 New research, conducted among 300 business owners and managers for leading business finance specialist Bibby Financial Services, shows that 35 per cent of businesses are finding customers are taking longer to pay invoices than 12 months ago – a worrying statistic considering the economy has officially returned to growth, albeit by a tiny amount.
 Some sectors are suffering more than others, with 47 per cent of manufacturing and construction firms saying that customers are taking longer to pay than a year ago, compared to 36 per cent of firms in business services.
 Twenty per cent of companies say they are chasing invoices three times or more, and a staggering 48,000 businesses have had to follow up invoices more than 11 times.
 Bibby Financial Services’ research comes just a week after the 2010 Budget in which Alistair Darling pledged that the Government will pay 80 per cent of its invoices from small business within five days. This is a reduction from 10 days and a steep but welcome target as, according to Bacs, small and medium-sized businesses are currently owed £30.4billion.
 Edward Rimmer, Bibby Financial Services’ UK chief executive, commented: “The UK business community has got to stem the tide. We cannot keep stalling payment and expect it to have no consequence. Across this nation, businesses are fighting for survival with sustaining a healthy cash flow one of the biggest challenges. We need to support one another and do everything possible not to succumb to the easy route of late payment as it can become a vicious circle which halts the purchasing cycle and, ultimately, can disrupt the supply chain, not to mention the impact on the goodwill and trust of other customers and suppliers.
 
“The Chancellor’s pledge to pay 80 per cent of public sector invoices within five days is a worthy goal but it must become a reality. Many local authorities are a long way off this target, not to mention the fact that this pledge does not encompass the private sector. If Alistair Darling really wants a lasting legacy, he should urge the private sector to participate in an invoice amnesty, pay all outstanding invoices and then adopt a new prompt payment culture.”
 
Edward Rimmer added: “There are some easy solutions to dealing with late payment and free up cash flow. Companies must ensure they are in control of their finances and then look at all the cash flow options available. If they cannot afford to install an internal or external credit control department then they could consider factoring, which takes away the hard work of chasing late payment and allows directors to focus on other aspects of managing their businesses.”