Late payments rise by an estimated 23% in the UK
A new unpaid invoice tracker has shown that late payments have shot up during the coronavirus pandemic, with a rise as high as 23% in the UK.
An increase in late payments will come as no surprise to the many UK businesses struggling to maintain their cash flow in these challenging times.
The new insight comes from a weekly tracker that analyses the payment behaviour of over 3.7 million businesses in six European countries: the UK, France, Spain, Italy, Belgium and the Netherlands.
Sidetrade, the company behind the tracker, have made it freely accessible in the hope that it will remind businesses of the importance of paying suppliers responsibly wherever possible.
Between 1 January and 11 March 2020, the tracker showed that late payments remained stable at around 20% across all the countries. Since 11 March, however, the increase has been steep.
An increase of 23% has been seen in the UK, although this is the lowest seen across all countries monitored. The Netherlands have seen an increase of 26%, 44% in Belgium, 52% in France and a huge 80% increase in Italy.
What does this mean for UK businesses?
The issue of late payments is not a new one for UK businesses, and while different measures have been put in place over the last few years to try lessening the issue, it’s continued to be a problem for many companies.
The current climate has intensified the problem significantly, and while the government continue with initiatives put in place to support businesses through this period, many will still be feeling a significant and detrimental strain on their cash flow.
Already we have seen a significant increase in insolvencies compared to previous periods, with many predicting this number will continue to rise drastically.
If you are concerned about your cash flow and the impact late payment could have on it, here are three options you could consider.
Seek commercial funding
While the majority of businesses are aware of the Coronavirus Business Interruption Loan Scheme as a method of funding their business, some may feel that this isn’t the best option for them, particularly if they are concerned about future repayments.
Other forms of commercial funding, some of which may be better suited to specific business needs during this time, are still available, however, and definitely worth exploring.
Outsource debt collection
Outsourcing your debt collection to an agency such a Hilton-Baird will not only take pressure off your employees and free up valuable time, but also shows your customers you’re taking your debt recovery seriously.
At Hilton-Baird, our expert team are able to use their experience to deliver you the best results. If you’d like to learn more about how we can help, call us on 0800 9774848 or request a call back from one of our collection consultants.
Act early and reach out to customers
If you are concerned about particular customers who have missed payment deadlines, acting early is the best thing you can do for your business. In this blog, we discuss some of the steps you can take to minimise the long term impact of late payments.
Finding out where you stand and exercising a proactive approach by contacting customers at different stages of the credit control process will not only demonstrate that you’re in control, but will also give you an early indication that a business may not be able to pay your invoices.
For support and assistance in collecting late payments, call our team on 0800 9774848 or request a call back at a time that suits you.