Businesses in London are being advised to act quickly on late payments. This comes as late payment issues continue to rise in the UK, with small businesses facing worrying statistics.
Frontline Collections has urged London Business owners of all sizes to act swiftly in the face of late payment or they may face never getting paid at all.
According to a report by the UK’s Federation of Small Businesses (FSB), 52% of small businesses in the country have experienced late payment in the last quarter. In addition, 25% of small businesses have reported an increase in late payments, with the construction, education, administrative, scientific, logistics, and IT sectors most affected.
London Small Businesses need to act
London has around one million small businesses and experts predict that millions of jobs could be at risk if no action is taken against this issue. Expert Debt collection agencies are helping to mitigate the problem, with millions of pounds being recovered in the process.
Award winning Debt Collection experts Frontline Collections are at the forefront in the battle against small business late payment.
Tony Meadows, New Business Manager at Frontline Collections has called on business owners to act quickly when dealing with unpaid debts, stating that “At Frontline Collections, we speak to small business owners every day that have issues with non-paying customers. Whilst we can help most recover what they’re owed, unfortunately for some, they leave it too long to act.”
“We have seen a sharp rise in public facing businesses experiencing issues. Dentists, Vets, Nurseries and Private Schools are amongst the sectors suffering non-payment in the current climate”
Late payment causing mental health issues
In addition to the late payment problem, a recent survey highlighted the mental health cost to business owners caused by late payments. Unpaid invoices not only have emotional consequences but they also drain resources and cash-flow. Despite various initiatives by the British government, many businesses are still facing payment-related issues daily.
Rising energy costs have only worsened the situation, with thousands of businesses being forced to close over the winter months due to the energy cost price cap not including them. The FSB has recommended a multitude of suggestions for the government to take action on this matter. A call has been made for large firms to publicly commit to maximum payment terms to small business suppliers in law by 2027.
Thousands of SMEs could go bankrupt
The severity of the issue has led some to estimate that hundreds of thousands of businesses could go bankrupt by 2023. With 37% of SMEs applying for credit to manage their cash flow, and 62% of the public believing that business payments should be made within a week, there is a growing demand for more controls in this area.
In their recent report titled “Time is Money,” the UK’s Federation of Small Businesses (FSB) revealed concerning statistics about late payments in the small business community. Shockingly, 52% of small businesses in the UK experienced late payment in the past year’s quarter.
Furthermore, 25% of these small businesses reported an increase in late payments. This issue is felt most acutely in sectors such as construction, education, administrative, scientific, logistics and IT.
With approximately five million SMEs in the UK, experts predict that millions of jobs could be at risk if the problem of late payment is not addressed urgently. Debt collection agencies have emerged as a valuable resource for businesses grappling with late payments.
Debt Collection Agency assistance
While many small businesses can recover what they’re owed with small business debt collection agency assistance, others leave it too long to act, putting their businesses in jeopardy.
According to the FSB report, 37% of SMEs applied for credit to manage their cash flow, while 62% of the public believes that businesses should be paid within a week. The report outlines recommendations for the UK government to take action on the issue, including calls for large firms to publicly commit to maximum payment terms to small business suppliers in law by 2027.
UK businesses are seeking assistance from professional debt collection specialists in order to avoid the tiring and costly task of chasing unpaid invoices. Pursuing overdue accounts can consume valuable time that could be better spent on more profitable tasks, such as focusing on paying customers.
As a result, many small businesses are turning to professional debt collection agencies for help. The UK debt collection industry has been instrumental in supporting enterprises of all sizes in combating late payments and unpaid debts.
Collaborating with a professional debt collection agency in London can provide significant benefits for businesses, including efficient solutions for both nationwide and international debt collection.