UK SMEs are wasting millions of hours chasing late payments
UK small business owners are finding it hard to keep up with late payments as they spend up to 56.4 million hours a year chasing overdue payments, with some business owners doing it outside of their regular work hours, eating into their personal and family time.
This is according to a report by commissioned by Intuit QuickBooks, which said more than one in five business owners would have already started chasing late payments before the start of the working day, with over three-quarters of them unable to sleep well the night before as they worry about their receivables.
The study found that 30% of business owners would use the time they saved on chasing payments to work on their existing businesses or complete tasks that encourage growth. The tasks include improving business processes, marketing activities, and finding new customers.
QuickBooks estimates the total time spent chasing invoices each year to £6.3 billion. It also refers to statistics by the Federation of Self-Employed and Small Businesses (FSB) which said small businesses are owed an average of £6,142, with most of these debts due from larger firms. They also state that more than 37% of small businesses run into cash flow problems and 30% have needed to use an overdraft to cover costs.
Small businesses also suffer from late payments. On average each of them is waiting for nine outstanding invoices and 11% of those typically get paid more that 200-plus days late.
The sample size of the study was 500 small businesses in the UK.
RIABU helps companies of all sizes – but especially SMEs – be first in line to get paid. We provide you with insights into the past payment conduct of prospects and customers, and how long they are likely to take to pay their invoices, based on the experiences of other suppliers. RIABU also helps you to get paid on time in the future, by giving you access to the RIABU Academy. There you can find expert advice, best practice guides, and peer forums to improve your policies and processes and ensure you get paid faster.