Credit Control

Just under half of large businesses admit to paying suppliers late to protect their own cash flow, according to a new report.

In the UK Business Payments Barometer 2018 survey carried out by Bottomline, 44% of businesses with between 250 and 10,000 employees said they pay invoices late in order to protect liquidity or prioritise other payments.

This comes just a year after the government introduced its Duty to Report (DTR) regulation requiring qualifying large businesses to publish information on payment practices, including average time taken to settle invoices.

Applicable to any company with more than 250 employees, £36m turnover or £18m on the balance sheet, the government hoped DTR would help to tackle late payment culture by bringing the worst excesses out into the open. If these latest survey figures are taken as a gauge, it is yet to work.

Wednesday, 01 August 2018 11:35

Northern Cities Come Out Top On Prompt Payment

The government’s much-vaunted ‘Northern Powerhouse’ may have turned out to be little more than a catchy phrase scribbled down on the back of a Chancellor’s fag packet. But at least contractors and small suppliers operating in the North of England’s biggest cities are more likely than most to get paid on time.

In a survey carried out by FreeAgent, small traders in Manchester reported the lowest rate of late payments nationwide. According to the findings, 86% of invoices issued by freelancers and microbusinesses in the city are paid by the due date - which compares very favourably to the national average of 52%.

More than a quarter of UK businesses have suffered negative consequences from another company becoming insolvent in the past six months.

A survey carried out by R3 revealed that one in 10 businesses have suffered a ‘very negative’ impact from a customer or supplier becoming insolvent since the start of 2018, while another 16% reported a ‘somewhat negative’ effect.

The figures come after a sharp spike in the number of companies being declared insolvent in the first quarter of this year. Led by the high profile collapses of Carillion, Toys R Us and Maplin, the number of insolvency cases rose an alarming 13% from the previous quarter.

The total value of overdue payments owed to UK small businesses has rocketed by an astonishing £1bn in just six months, according to a new report.

The survey by small business financiers Liberis found that the average SME was waiting on £11,000 in outstanding payments. When extrapolated across the country’s 5.5 million small businesses, that generates a total figure of £14.9bn - up by a billion on findings from just six months ago.

The Church of England fears that it could be forced to sell off some of its prized cathedrals in order to stave off bankruptcy - and is seeking to pass news laws to prevent that happening.

At the General Synod of York - the CoE’s equivalent to Parliament - bishops were presented with a report detailing the financial difficulties of diocese including Exeter and Peterborough, both of which are centred around historic cathedrals.

The Government’s flagship initiative for helping small businesses when they face unpaid invoices has been dealt something of a PR blow - by the man they appointed to lead the scheme.

Speaking to The Times, Small Business Commissioner Paul Uppal, who ran a construction business for 20 years before becoming a Conservative MP, insisted he understood from experience “the real anguish” not being paid on time creates for SME owners.

If there is a way of defrauding your company out of money, someone, somewhere has already thought of it. In fact, they are more than likely already sitting on a hefty pile of cash from the profits they’ve made illegally.

A lot of attention is paid these days to the sophisticated digital scams carried out by international cybercrime syndicates. But that doesn’t mean anyone can afford to take their eye off the ball when it comes to less technologically advanced tactics.

Latest official figures have confirmed what most people in business already suspected - the UK economy isn’t looking in too great a shape. Growth has stalled to a virtual standstill, just 0.1%, following the worst quarterly performance in five years in the first three months of 2018.

Confidence is low amongst both businesses and consumers, with investment and household spending both down - two factors which, of course, feed one another. In addition, the early months of 2018 have witnessed a succession of big-name company failures, from high street chains like Toys R Us and Maplin, to public sector outsourcing giant Carillion.

It seems that no news is good news when it comes to tales of insolvency and corporate debt across the UK economy at the moment. Maternity and baby specialist Mothercare is the latest name to join the swelling ranks of high street retail chains teetering on the brink of collapse.

Mothercare has announced plans to close a third of its stores - a total of 50 outlets - as part of a proposed Company Voluntary Arrangement (CVA) to offset losses of £72.8m in the last financial year. If approved by creditors, the move is expected to see up to 800 jobs cut.

The Parliamentary report into the collapse of disgraced outsourcing giant Carillion has certainly pulled no punches.

Amongst the tastiest soundbites, MPs have accused bosses of ‘stuffing their mouths with gold’ while the company’s finances floundered, summing up their behaviour as ‘recklessness, hubris and greed’.

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