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20 Apr 2009
Comments:1
UK businesses are becoming more cut-throat when chasing late payments in the economic downturn, claims debt recovery law firm Lovetts.
Based on research among its own clients, Lovetts claims legal letters demanding payment from tardy customers are being sent out an average of 39 days earlier than in 2008.
Charles Wilson, Lovetts chairman, said: “Firms need to act early. Let customers know you are serious about payments because businesses need to keep enough blood flowing round.”
Further reading
Eddie Pacey, director of credit at distributor Bell Micro, said: “Companies are no longer willing to wait for their money. Firms may be under pressure themselves from credit lines so they need to chase debts to improve their own cash position.”
Richard Tubb, IT consultant at Netlink IT, said the Microsoft small business specialist chases payments to ensure they are not late.
“We chase invoices on a weekly basis to keep on top,” he said. “We have been asking for bigger deposits and if a customer has a bad credit limit we ask for a payment upfront.”
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Do you agree?
SMEs need to address financial processes to avoid late payments
SME owners clearly need to address financial processes - and could be doing more to help themselves. They have a responsibility not only to avoid bankruptcy but also to help the city avoid a full-blown recession. This critical cash-flow crisis is a paper versus electronic payments issue. Why are businesses still struggling with paper payments when they could almost eliminate cash-flow problems using electronic funds transfers (EFT)?
29 per cent of SMEs responding to recent Bacs research declared they could go bankrupt with overdue invoices of just £20,000 and spend 38 days a year chasing late payments. These figures alone highlight the false economy of relying on cheques instead of switching to financial software that could avert this stress and potential ruin.
Electronic financial packages provide solutions that allow Bacs payments, reduce transaction costs and decrease data errors. Business owners can relax, knowing that monthly payments will be collected by Direct Debit (DD) automatically on a date agreed at the outset of negotiations. From the start of contract, the business owner is in control of collecting payments, eliminating the need for endless cheque chasing.
The Bacs research shows astonishing numbers of SME owners are still entrenched in archaic processes that stall business and add to the already bleak national picture of an economic downturn.
Yours sincerely,
Adrian Stafford-Jones
Managing Director
Albany Software
http://www.albany.co.uk
Posted by Adrian Stafford-Jones | 21 Apr 2009
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