Does your business suffer from late payments?
Research from the Federation of Small Businesses (FSB) show that more than half (51%) of small businesses suffered from late payments from larger firms in 2013.
The FSB surveyed over 8,000 businesses to get these results, and is calling for the government to strengthen the Prompt Payment Code to make it easier for companies to complain about payment terms. It is also trying to implement a culture change amongst larger businesses who often make late payments or extend their payment terms to up to 120 days.
Late payments can have a negative effect on any business, but especially so with smaller businesses. The survey found that late payments or extended payment terms caused a number of problems for small businesses including reduced profitability (34%), paying their suppliers late (32%) and restricting their business growth (29%).
John Allan, National Chairman of the Federation of Small Businesses commented on the findings, saying: “As the economy gets stronger we must do everything we can to help businesses and late payment is an issue the Government and large businesses must tackle.
Small businesses simply can’t be expected to lend interest free to their large customers, which is in effect what extended payment terms and late payments results in.”
Has your organisation struggled with late payments from larger businesses in the past?
IRIS has been helping small businesses for over 30 years with our range of payroll solutions. Regardless of your business size or requirements, there is an IRIS Payroll solution suited to you.