Creative agencies and freelancers are being stung by an average 27-day wait for settlement of overdue invoices, according to a new report.
The findings come from a survey of over 5000 invoices issued by organisations such as IT developers, digital marketing consultancies, design specialists, film, TV and photography contractors and more. The study, carried out by business lender MarketFinance, found that clients were routinely paying service providers and suppliers late despite already insisting on lengthy payment terms that averaged out at 45 days.
A new year, a new decade even - but still the damning picture of just how much damage the UK’s late payment culture is doing to the small business economy continues to develop.
The latest depressing statistics, courtesy of digital business banking platform Tide, show that UK SMEs are on average spending a staggering one and a half hours every day chasing unpaid invoices. When you extrapolate that across the economy, that translates into 900,000 working hours being lost every single day.
It’s a billion-dollar industry that, unless you take your video gaming seriously, you might not even know exists. But the world of esports - competitive cash-prize and professional video gaming - has become big business, with live events attracting audiences of millions online and in person, not to mention highly lucrative corporate sponsorship deals.
The latest official figures detailing the number of convictions and other enforcement actions made under the Companies Act show that Insolvency Service activity is down by as much as 50% year-on-year in a number of key indicators.
The Insolvency Service publishes monthly statistics detailing the number of prosecutions, fines and winding up orders it has executed against individuals and businesses for breaching rules relating to the fit and proper running of businesses. Many of the actions are made under the terms of the Companies Act 2006, which sets out clear responsibilities for company directors and makes individuals personally liable for mismanagement of businesses leading to insolvency.
At the start of September, the pound fell to its lowest level since the immediate aftermath of the EU referendum result in 2016. On that occasion, its value quickly rallied as markets and currency exchanges adjusted to the new political reality. This time, with the UK in a state of political turmoil and a no-deal Brexit looking ever more likely come 31st October, there are concerns Sterling could endure at its weakest value in 35 years for the forseeable future.
A weak pound means a weak economy. Forget all attempts to dress it up otherwise. And on the front line feeling the sharp edge of its effects are the small businesses trading overseas which are having to deal with eroding margins and turbulence in their supply chains.
One of the most notorious incidents of cyber crime to date also stands out for the bare-faced cheek and simplicity of the methods employed. When criminals targeted Austrian aerospace firm FACC, they didn’t bother trying to hack into the company’s IT systems, bring down firewalls with a DDoS attack, or plant malware on its servers to quietly mine sensitive data.
Instead, they simply impersonated CEO Walter Stephan, sending a fake email in his name authorising a junior member of the accounts teams to send $47m to what the email claimed was the bank account of a company Mr Stephan was negotiating to buy. It wasn’t, and the thieves made off with the biggest single haul in cybercrime history.
Figures taken from a government consultation into tackling late payment culture reveal that just one in 10 businesses paid late by clients take up the option of adding permissible charges.
The report published by the Department for Business, Energy and Industrial Strategy further confirms the shocking extent of late payments across the UK economy, with 97% of participants in the consultation saying they had experience of not being paid on time. More than a third of the businesses asked (36%) said more than half of their invoices were settled after the agreed deadline.
In our line of work, we come across some colourful characters to say the very least. We all know the stereotypes about the shady circles debt collectors have to move in. Well, while we’re not always keen on the cliches, the truth is in the course of recovering debts, we do have to deal with a motley assortment of fraudsters, conmen, chancers and career criminals, all often operating under the guise of supposedly legitimate business interests.
What we certainly never do is feel any ill will towards anyone we attempt to collect money from. At the end of the day, it is a professional service we provide, to look after the interests of the small business owners, freelancers and contractors who come to us, often at their wits end, to try to get back money that is rightfully theirs. But whoever it is that owes the money, and whatever their reasons for not paying their debts, they are still people.
One of the things suppliers are always advised to do before agreeing to provide any client with goods or services on account is to check their credit rating.
It’s a simple way to increase your own protection against serial defaulters and outright rip-off merchants. If a company or an individual has a good credit score, it means they haven’t got anything in their past that should give you cause for concern about their ability or intention to pay.
The number of County Court Judgments (CCJs) against businesses in England and Wales shot up by 12% in the first quarter of 2019, according to official figures from the Registry Trust.
A total of 35,779 CCJs were issued in the first three months of the year with a combined value of £107.2 million - a year-on-year increase of 6% from the same period in 2018. The figures show that judgments have gone up against both incorporated and non-incorporated businesses, part of a longer term trend which has seen the net value and frequency of CCJs increase.