Late payment crisis deepens, making credit control training and outsourcing top business priorities
The latest report from The Federation of Small Businesses (FSB), reveals that despite the Late Payment Directive’s stated maximum payment terms of 60 days, the issue of poor payment practices continues to persist.
According to the new study titled, ‘Pay it Forward: Lessons and recommendations for Europe from the UK payment landscape’, the vast majority (83%) of SMEs that operate within European supply chains are still being paid late.
A third (35%) of businesses surveyed stated they spend a substantial amount of time chasing payments, with 17% of respondents saying that they have been paid more than 60 days after providing an invoice. Supply chain bullying has been cited as a major issue with 17% of SMEs claiming that they have encountered this pernicious practice in the previous two years, including retrospective discounting.
Jenny Oldfield, CEO of Veritas Commercial Services, said: “The statistics make concerning reading, with late payments leading to the closure of around 50,000 companies in the UK every year. Not only that but the repercussions of late payment by large corporates affect the entire supply chain, including the buyers themselves. The domino effect is considerable, leading to a lack of investment in systems and technology and in under-resourced service provision by suppliers or far worse. We believe from our experience that businesses that have effective credit control processes, procedures and training will continue to thrive in uncertain times, while others will regrettably fail. A renewed focus on eradicating the scourge of late payment is in the interests of every party involved, benefitting the wider economy and stabilising the entire supply-chain ecosystem.”
“Reliance on legislation is clearly not enough in itself. We are confident that credit control training has the real potential to emerge as a vital competitive edge for every organisation in the UK. When you consider that without late payment issues, business profits would be 2.6 per cent higher, translating into a £4.8bn uplift, it is clear where businesses should be focusing and driving their operational and financial investment. With a third of businesses spending more and more time on chasing payments, a combination of professional credit control training and outsourcing to Virtual Credit Control partners is the only logical way forward.”
To read the full report, simply click on the link below.Back
COVID - One year OnAs credit managers and credit controllers reflect on the challenges in managing their sales ledger asset over the past 12 months, we take a look at the various issues faced and how we expect that has changed the support needed from your credit control team moving forward.
Entrepreneur of the Year AwardThank you to all of our great clients and team. Without them, I would never have won this award.
B2B Credit Control - Instalments & Late Payment Interest"Historically repayment plan arrangements have been limited to the odd customer with cash flow issues, it is now more prevalent and credit control software needs to adapt to deal with that, free up the credit controllers time and provide accurate management information”. Janice Megram, Client Services Director, Veritas Commercial Services.