Dealing with late payments can be one of the biggest challenges that small businesses have to face.
According to statistics published by FSB, 62% of small businesses have experienced an increase in late payments or had their payments stopped due to the Coronavirus pandemic.
Dealing with late payments and chasing late invoices is a huge pain for SME’s, it’s time-consuming and mentally draining. You may be worried about ruining a relationship with a client, but you also deserve to be paid on time.
What effect are late payments having on business owners?
“More than a quarter (26%) of SME business owners stress about late payments even when they are not at work; 17% say that payment delays undermine their own confidence in their ability to run a business and 16% worry about the issue every working day.” – Pay.UK
These statistics are not surprising, especially when we consider the impact the pandemic had on businesses and their finances overnight. Running your own business can be stressful at the best of times, and problems with late payments only heighten the stress levels and create problems and affect other areas of the business….
Late payment consequences which undermine the emotional wellbeing of SME owners include: paying their own suppliers late (24%), relying on overdrafts (35%), cutting their own salaries to keep cash in their business (24%), difficulties paying their own staff on time (12%) and struggling to pay business bills (13%). – Pay.UK
How can I avoid late payments?
Receiving late payments from your clients is sometimes part of the risk of running your own business – although it shouldn’t be.
Although there isn’t much you can do to stop late payments altogether, there are a few steps you can take to mitigate the risks.
Here are a few of our top tips for dealing with late payments:
- Choose your clients wisely! Do some research to ensure your client is reliable and legitimate.
- Consider requesting up-front payments or deposits. Reliable clients won’t have an issue with paying upfront.
- Always use contracts to set out your payment terms, deadlines, and state the legal action you will take if you do receive payments on time.
- Consider invoice factoring and sell your invoices in advance. Invoice finance is designed to alleviate cash flow pressure by allowing you to continue business-as-usual, despite waiting on due invoices.
How can Ascendis help?
Our trusted team can advise you on the best course of action if unpaid invoices are a cause of cash flow stagnation within your business.
- Releasing a percentage of your owed invoice within 24 hours of invoicing.
- Protecting and managing your credit control and sale ledger.
- Offering Bad Debt Protection to protect you against customer insolvency.
- Manage your account with our Ascendis online service
Speak to a member of the Ascendis team today on 0161 359 4227.
If you are feeling overwhelmed by the stresses of running your own business, it’s important to seek the help available as soon as possible. You can access Mental Health Services here.