PCM Volume 5 - Issue 1: Recurring Payments

CAN TECHNOLOGY SOLVE THE PROBLEM OF LATE PAYMENT FOR SMALL BUSINESSES? Why aren’t more firms using tech to get their bills settled on time?

Being paid late causes business owners severe personal stress and huge professional damage.

Why aren’t more firms using tech to get their bills settled on time?

Many business owners across the United Kingdom are reporting that getting paid late is more of a concern to them than the country leaving the European Union. Late payment is the problem that just won’t go away for small and medium-sized businesses (SMBs).

Eight out of ten SMB bosses fear they may not be able to cover their own work-related bills because of being paid late by customers, according to our recent research. More than half have had to dip into personal savings or use emergency finance to pay their company expenses as a result. Yet, far too few realise that changing up your tech stack could in fact be the cure to this all-too-common headache.

Summertime - and the living isn’t easy Summer is the worst time of year for getting paid, two-thirds of businesses say. In fact, almost half of SMB owners only take between one and two weeks of holiday a year because they’re too worried about payments to allow themselves time away from the business. One in ten has no vacation at all, our findings suggest.

It’s no wonder that 41 per cent believe late-paying customers are having more of a negative effect on their operation – and mental health - than Britain’s imminent divorce from the European Union.

If British businesses were all paid promptly that would equate to a £2.5 billion annual boost to the UK economy, the Federation of Small Businesses calculates. Vitally, around 50,000 SMBs in Britain would be prevented from closing every year. And it’s not just UK firms that suffer because of unpaid bills. Our research in France shows that 50 per cent of French SMB bosses have had to sacrifice salary due to being paid late. In Australia, more than six out of ten business owners have had to forgo their own pay, holiday or hiring new staff because customers have left them out of pocket.

6 | GO CARDLESS