Cash flow is known to cripple millions of small and medium enterprises around the globe, in fact Sage undertook a survey in January 2015 that showed 1 in 10 SMEs are being crippled by 'cashflow' and a staggering two-thirds of small businesses had to wait over 60 days for late payments
The survey suggests that the issue spans customer sizes and types, with 33% of Yorkshire SMEs reporting that most of their late payments
were from large businesses, 9% pointing to the public sector and 8% identifying mediumsized firms as being responsible for late payments
The issue of late payment
and supply chain bullying is something the FSB has been very concerned about in recent years.
Where businesses do expect cash-flow to be an issue, they need to take action to manage issues like late payment
so that it doesn't hamper their opportunities to grow.
An Incentive Package has been approved by the Board of Directors Pesco to waive off Late Payment
Surcharge levied in the electricity bills of Federal and Provincial Govt departments including Autonomous and Local bodies for not paying the bills on time.
Although the Government is keen to make an impact on late payment
, progress has been disappointingly slow over 2014 and 2015.
But there are actions business owners can take to tackle the problem head on: Invoice clearly and on time - it can mean the difference between being paid promptly and the invoice being 'lost in the system'; Make 30 days your mantra - standardised by the European Late Payment
Directive; Take electronic payments rather than cheques - funds are cleared and available to use as soon as they are paid; Run a credit check - if the company you are dealing with is experiencing financial problems it is more likely to delay paying; Be proactive - politely, but firmly, pursue late payments
by email, in writing and with a call.
A further 68% of those negatively affected by late payments
say the situation hasn't improved in the last year.
In an open letter published on the Sage Group's website, UK chief executive Brendan Flattery said the Newcastle software firm supported proposals to address the "unacceptable situation" of late payment
The report shows that late payments
occur in EU countries facing adverse financial conditions, sush as Greece where payments of commercial transactions take from 110 to 160 days, Italy 90 -- 170 days, Spain, 80 -- 160 days, Spain 80 to 160 days and Portugal where payments take from 75 to 135 days.
5% of SMEs feel they can charge interest on late payments
and feel threatened by larger firms who will stop dealing with them.
Among these actions is the implementation of the Late Payment
Directive which came into effect on 16th March last year, aimed at improving payment practices in commercial transactions between businesses and between businesses and Public Authorities.