The new head of the Federation of Small Businesses (FSB) has told the government the UK’s late payment culture is hurting the ability of SMEs to deal with spiralling costs.
In an audience at Number 10 Downing Street, Martin McTague, who was appointed chair of the Federation in March, spelled out his concerns about the economic challenges facing the UK’s five million small businesses.
High on the list was the on-going issue of late payments, which McTague said was holding back post-COVID recovery in the SME sector and causing unnecessary financial distress as inflation hit a 40 year high.
The Small Business Commissioner (SBC) Liz Barclay fears the UK’s late payment crisis “could get worse before it gets better.”
Speaking to the Federation of Small Business’s First Voice podcast, Ms Barclay conceded that more and more small businesses were suffering as a result of late payments “in the current climate”, and was not optimistic about the situation improving any time soon.
One in four freelancers are thinking about ditching self-employment because of problems getting paid on time, according to new research.
In a survey carried out by payment platform WondaPay, 24% of freelancers said they were considering looking for permanent employment because of persistent problems with late payments.
More than 400,000 small businesses in the UK are at direct risk of going under as late payments continue to rise.
Fed up of clients who refuse to stick to agreed payment terms? Feel like you're being held to ransom by large customers who insist on making suppliers wait two or three months before they pay for goods or services received?
The government’s Small Business Commissioner (SBC) wants to hear from you. The Commissioner’s office, which is part of the Department for Business, Energy and Industrial Strategy (BEIS), is holding a consultation on SME’s experiences of late payments that closes on 15th December.
As the financial fallout of the COVID-19 pandemic continues to sweep through the economy, latest figures show that SMEs have been hit by a 20% surge in late payments over the past 12 months.
According to research from cloud-based credit management platform Know-It, the total value of overdue invoices UK-based small businesses are now waiting on has leapt to £61 billion, a sharp rise from the no less eye watering figure of £50bn reported in 2020.
In our last blog, we highlighted some of the dangers businesses face from fraudulent operators posing as legit companies, but whose real intention is just to rip you off.
So what can you do to avoid these risks? The answer is all about due diligence and knowing exactly who you are dealing with before you make a payment or sign a contract. Nowadays, formal ‘Know Your Customer’ or KYC background check services are available as byproducts of strict anti-fraud regulations in the financial industry.
But as useful as such services are, there are simple things every business can do directly for themselves to check out the credentials of any potential new client or supplier. Here are three simple steps to take to avoid being ripped off.
With incidents of fraud on the rise over the course of the COVID-19 pandemic, we’re all having to be even more vigilant in our dealings, especially online.
But while the risks of phishing scams and lax digital security are well known, companies are still very much at risk from a more traditional approach to con artistry - doing business with cowboy operators whose primary aim is to rip you off.
It’s a sad but well-documented fact that the most unscrupulous individuals will happily try to exploit any crisis for their own gain.
So it was in spring 2020, almost as soon as the first COVID-19 lockdown kicked into gear, that there was a wave of reports of pandemic-related email and phone scams, trying on everything from fraudulent PPE sales to ‘phishing’ for personal information through bogus medical registrations.
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At Safe Collections, we’ve been banging the drum on the UK’s late payment culture for years, making the case over and over again that without the stick of meaningful enforcement, there is little incentive for large companies to stop holding smaller suppliers over a barrel when it comes to payments.
Finally, it seems like the message may have gotten through to the government, although on account of the time it has taken, we can only conclude they are listening reluctantly.
Background credit checks are a great way to dodge doing business with the wrong people. Safe Collections customers can claim a FREE trial of Experian Business Express, the industry-leading commercial credit reporting service, and enjoy a 50% discount if they sign up for.
You couldn’t accuse the UK government of wishing a second national lockdown. In fact, according to critics, the Johnson-led administration is guilty of trying to fend off the inevitable for too long, failing to take the decisive action that just might have nipped the ‘second wave’ in the bud back in September when it was clear cases were rising again.
The government’s reasoning is no secret. It wanted to do everything it possibly could to keep the already battered economy open, fearing the long-term consequences of another significant shut down in trade and commerce.
And yet here we are. After it became clear last week that the regional approach to COVID-19 restrictions wasn’t going to be enough, that transmission had galloped past the worst-case working assumptions, and that the NHS was already close to being overwhelmed in some areas, No 10 felt it had no other choice. Another U-turn, another lockdown, another month (we hope) of all but essential customer-facing businesses being shut.
It is not likely to be news to any business owner that the COVID-19 pandemic has seen late payments soar.
The fallout from the crisis has seen revenues across the economy plummet, with the Office for National Statistics (ONS) reporting a 20.4% slump in GDP in Q2 of this year while the country was in full lockdown.