Business Debtline is calling for more support on late payments for those who are self-employed and small businesses.
The charity is run by the Money Advice Trust. It provides free, impartial and confidential advice on debts to small businesses and self-employed people.
The late payment of invoices is having a significant impact on the viability of these businesses. Research conducted for Business Debtline indicates the scale of the problem. The Taking Care of Business report shows that almost half of their callers (45%) had issues with late payers.
These late payments might not directly result in financial difficulties for a small business. However, they do cause cashflow issues and compound any existing debt problems.
Where small businesses are struggling with the late payment of invoices, they are increasingly using personal credit to pay invoices and other essential costs. According to those surveyed by Business Debtline, 61% had used their own personal credit in the past two years to cover business items.
More support for small businesses
The recommendations from the charity include giving the Small Business Commissioner the ability to fine companies that persistently pay invoices late. They also want to see the role given a wider remit, which would cover public sector organisations.
Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs Business Debtline, said: “With small business ownership and self-employment continuing to grow and help drive the economy, it is only right that the people behind these enterprises are given the best opportunity to flourish.
“However, the recurring issue of late payments remains a barrier to many businesses succeeding. Our advisers hear first-hand the financial impact of late payments on businesses’ abilities to pay essential business costs such as business rates, energy bills and suppliers. This can create a domino effect where late-payment related problems cascade through the supply chain.
“The government’s focus in this area is welcome. It is now crucial that further steps are taken to improve payments culture, including giving the Small Business Commissioner the power to fine persistent late payers. We look forward to working with all those involved in this area to take forward these recommendations.”
Help with late payments
Where a business is having problems with late payers we can help. Our business to business debt recovery service is free to creditors, with no fees to pay. This applies to pre-judgement invoice debts sent to limited companies, PLCs and LLPs.
Often using a third-party debt recovery service is all it takes to push a debtor into paying their invoices. Doing so may also stop them from paying late in the future.
It is a quick and simple process, which takes away the hassle of chasing your unpaid invoices. We will do all the hard work for you and, where a County Court Judgement is required, can escalate the case.
Click here for more details on our debt recovery services. If you are having issues with the late payment of invoices contact us today on 0113 532 8350 to see how we can help.