A failure to follow the 'golden rules' of credit control is leaving many SMEs facing a significant burden of payment chasing this summer, says RBS Invoice Finance.
The bank's specialist team has compiled figures showing that small firms are currently receiving payments an average of 30 days beyond the agreed deadline.
Many businesses that work with local authorities are facing a 'postcode lottery' to determine whether their accounts are settled on time, or whether they must deal with late payments from their council customers, says the Forum of Private Business.
The claim is significant because, back in 2008, the government called for councils to pay their suppliers' invoices in no more than ten days - a way to keep small businesses' cashflow healthy, as well as to ensure liquidity within the wider economy as a whole.
Following on from the news that UK PLC's are sitting on a staggering £64 billion excess of capital the latest figures from Bacs Payment Schemes show overdue payments to UK SMEs are now at a record breaking all-time high of £35.3 billion.
The data was compiled at the end of 2011, and showed a £2 billion increase in late payments in the space of just six months.
Late payments to creditors by UK PLC’s are being used to add to the working capital companies have at their disposal, according to a new report from Deloitte.
The professional services provider has analysed the working capital performance of 20,800 companies with global operations over the past five years, enabling it to compile a £64 billion estimate of excess working capital in the UK - a rise of £3 billion since 2010.
Local authority late payments are almost as much of a problem now as when, in 2008, the government first introduced a ten-day target for settling its invoices in the regions, reports the Forum of Private Business.
A headline-grabbing report from the Forum of Private Business and Graydon reveals that formal credit control processes are in place at fewer than half of the UK's small businesses.
The survey looked at 500 companies across the UK, and just 44% said they had formal credit control procedures to fall back on if they are not paid promptly by debtors. However, many others admitted to making use of a spur-of-the-moment approach to payments, with 16% juggling payments as they go along and 38% mixing formal credit control processes with informal payment-chasing.
We always say that a sensible approach to invoicing can help to cut down on the number of problems you face - and that's still true. Chasing up invoices, making sure they've been received by the client, and querying any payments as soon as they become overdue can all help to encourage clients to pay up on time.
But when an invoice goes unpaid, it's easy to find yourself becoming more and more lenient in the hope that your client will eventually pay - while they become less and less reasonable in their reasons for delaying.
If a French client owes you money, you can apply a certain amount of pressure to encourage payment, and many clients will pay up eventually. But in some cases, you’ll need to instruct a lawyer in France to collect the money you’re owed.
Debt collection in France is a slightly different procedure, compared to debt collection in the UK. This blog provides a rough guide to your options and the types of court action you could bring.
French courts will uphold court judgements made in other parts of the EU and, in some cases, outside the EU as well. For the purposes of this article, we are referring only to court action taking place in France against clients who live and work there.
Small firms in Ireland are waiting an average of 62 days for their invoices to be settled, but when it comes to debt collection Ireland's entrepreneurs are still reluctant to take action.
These are the findings of the Small Firms Association's Late Payment Survey, published in early January, which looks at the issues affecting the credit control and debt recovery Ireland's small businesses use to keep their accounts - and their non-paying customers - in check.
Late payments are a pain for all of us, clapping the irons on our cashflow, disrupting client relationships and generally causing a world of stress until they're resolved either directly or through the intervention of a debt collections specialist like Safe Collections.
But on an international scale, late payments cause even bigger headaches for economies across the EU, leading to an annual debt of €23.6 billion (£19 billion) according to European Commission figures.