29 Jan 2016
Businesses appear to be facing growing problems in getting paid after new figures revealed a 60% increase in late payments.
Research for Bank of Scotland found the average amount owed to SMEs on invoices has increased to around £80,000 from £50,000 since 2014, with late payments identified as the biggest challenge facing firms.
The Federation of Small Businesses in Scotland said the findings underline the seriousness of a problem which could force many businesses over the edge.
Four in ten of its members have waited over 90 days beyond the agreed payment date before they eventually get what they’re owed.
So what can you do make sure your business gets paid on time?
Aberdein Considine Partner Rob Aberdein is one of Scotland’s leading debt recovery lawyers and acts for many of Scotland’s lifeblood SMEs.
He says businesses should follow these five key steps to make sure they avoid losing out.
Issue invoices with clear payment terms and as many ways to make payment as possible. If possible, also make an online payment portal or internet banking available.
Make sure you have robust credit control processes in place internally. These will flag non-payments early.
Don’t be afraid to pursue unpaid debt proactively yourself – if you’ve done a good job or supplied the goods, you deserve to be paid.
If you think the debtor is in financial difficulty – go early and shout loud, often the loudest voice will get paid whilst others may not.
Don't make idle threats to go to court. Commit to a back stop date or set of circumstances and be prepared to follow through.