Businesses within the insurance, pensions, charity, and voluntary sector are facing their biggest fight in recent years – late payments.
Organisations being forced to continually engage with late payers as a result of Covid, are facing ongoing financial pressures despite significant government support, a position unlikely to improve as we enter what economist have labelled as “the final home stretch “of the crisis. This is according to Know-it, the cloud-based credit management platform.
Research issued in the past week from card payments specialist take payments limited found that more than one in four UK small businesses are facing cashflow issues and this is the greatest financial concern they are facing today. Not only has this been driven by the economic collapse caused by Covid-19. but they are frequently chasing late payments.
Lynne Darcey Quigley, Founder & CEO of Know-it, commented:
“This research has highlighted the ongoing struggle many businesses are facing in managing cashflow and key to that is late payments. SMEs are particularly vulnerable and have been significantly impacted by the crisis, subject to extended payment terms by big corporations.”
According to the research the insurance and pension sectors appear to be the most fearful with 46 per cent of the industry chasing late payments, while the charity and voluntary sector positioned a close second place with 42 per cent.
“Unfortunately, the data highlights an increasing challenge when it comes to late payments.
Despite the government outlining a route out of lockdown, many organisations on the receiving end of late payments will struggle to survive after the crisis. As we have seen from the data, businesses are left with little choice but to carry on and work with businesses deemed bad payers, often to their own detriment. To avoid organisations continuing in this vicious cycle its imperative business leaders are made aware of the tools and resources available to them, which can improve cash flow.”
“Even after Covid-19, the problem of late payments and its devastating impact on SMEs isn’t going anywhere. Yet, there is still time to give these businesses the tools and support they need. Throughout the pandemic we have learned that, with the help of technology, we can do things electronically and more efficiently than before. This is why we believe there is an opening for technology to help SMEs streamline their credit control processes so they can credit check and monitor, chase for payment and collect overdue unpaid invoices, all from one place.
“By using technology to automate the credit control process, small business owners, who do not necessarily have the resources available to continuously check it, chase it and collect it, can remove the headache of manual processing, saving time, reducing debtor days and increasing cash flow. Although much of the onus will also be on larger companies to improve their payment practices, there is room for technology to make a huge difference for SMEs and ensure payments are made on time.”