The Commercial Domestic Investigations team understands that British small business owners cannot afford to let late payments go unchallenged. A new study has found that UK small company owners are spending a significant amount of time on chasing unpaid invoices.
Major business concern
The research was carried out by Xero, an online small business accountancy service. It showed that 52% of British company owners hold concerns over unpaid invoices. The worst affected regions are London and Wales, where business leaders spend 1.5 days and 1.3 day per month respectively chasing down late payments.
Xero also broke the results of its research down by sector, detailing how long business owners in various industries spend on hunting down late payments. The worst affected UK markets, according to Xero, are HR (three days), IT & telecoms (1.8 days) and manufacturing and utilities (1.8 days).
Problem for small businesses
The study indicated that late payments are a particularly pressing problem for British small businesses. According to Xero, small company heads spend an average of 10% of their working days hunting down unpaid invoices. On average small business owners, Xero discovered, have to wait an extra 14 days past invoice due dates to receive the necessary payment.
Xero’s study also asked small businesses about the main causes of late payment. The top two issues cited by small firm owners were the fact that their customers are often left waiting to receive payment themselves (32%) and inconsistent payment terms in contracts (27%). Xero further looked into the consequences of unpaid invoices for British firms. The most popular responses included loss of productivity (37%), loss of cash (25%) and the fact that it creates a backlog of work (20%).
Crippling business problem
Commenting on the research Emma Jones, the Founder of business community Enterprise Nation, was quoted by Small Business noting: “Nearly 60% of all UK small business invoices were paid late in 2015, which can cripple and often close a business within its first few years.
“The late payment epidemic the UK is facing has to change so small business founders don’t spend so many hours chasing doubt and worrying about cash flow on the back of late payment. With small businesses making up a staggering 99.8% of the British economic engine, this is a critical issue to sort for the betterment of the UK economy as a whole.”
Adding his commentary, Xero UK Managing Director Gary Turner said: “Brits spend more in online retail per shopper than any other country, but the UK has a dismal productivity rating compared to the rest of the G7 nation. Our recent research has proved that small businesses are continuing to waste time chasing payments, only adding to the problem with productivity we face in this country.”
About Commercial Domestic Investigations
Commercial Domestic Investigations are regarded within the debt collection and credit control industry as one of the best credit management companies in the UK. Established in 1988 to support and service all sizes of companies in the field of Credit Management.
Commercial Domestic Investigations have recently featured in the press in The Guardian. To keep up to date with the latest debt collection news make sure to follow Commercial Domestic Investigations on twitter, LinkedIn and Google+.
We now boast a national client base in excess of 30,000 companies. Commercial Domestic Investigations has grown by listening to clients’ requirements and adapting our services to meet all companies’ needs from Sole Traders, SMES, Ltd and Plus. Please contact us on 08444 159200 for more information.