THE 'BAck to business' guide

LATE PAYMENTS

FROM THE UK'S LARGEST INDEPENDENT INVOICE FINANCE SPECIALISTS

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REDUCING THE IMPACT OF LATE PAYMENT

What is a late payment?

Figures from a survey conducted by Zurich in June 2016 showed that British SMEs were owed over £255 billion. Our latest survey of British SMEs has highlighted that over 50% of businesses with a turnover between £500k and £1 million said that late payments are a significant concern for their business in the next 12 months.

  • British SMEs are owed over £255 billion
  • 40% of SMEs don’t know how much money they are owed

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How will it impact your business?

Findings of our research show that an average, businesses waited 38 days for payment in Q3 2016. On average SMEs in London wait 47 days for payment compared to their counterparts in Wales who wait on average 32 days for payment. For many businesses, late payment can mean stalled ambitions, lower growth, and time wasted over chasing clients for payment. At worse, it can break a business. However, there are ways to both tackle head-on and offset the effects of late payment, ensuring that you have a healthy cashflow to take on more work and grow your business.

Find out more at www.alternativebusinessfunding.co.uk

The following considerations will help you adjust to the new rules and prepare your business for future changes.

Number 1

KEEP UP TO DATE RECORDS

Whether you have a finance specialist within your business or not, you should have some level of financial reporting so that you can keep a close watch on payment times. Keep an accurate and up-to-date record of your business’s cashflow so you can keep an eye on, and understand, the movement of money to and from your company. This will ensure that you can identify payment issues earlier, helping you to take steps to resolve them.

Number 2

OFFER PAYMENT INCENTIVES

Although this may not work for every business model, payment incentives can sometimes encourage customers to make payment more quickly. You could offer an early payment incentive, giving customers a discount on their invoices if they pay promptly or within a few days of an invoice being raised.

Number 3

CONSIDER CASHFLOW FUNDING AND CREDIT CONTROL SUPPORT

An in-house or outsourced credit controller, or credit control team can ensure you have effective terms and conditions with your customers, in addition to ensuring that outstanding money owed is chased when required. In addition to arranging payment collection, credit controllers can assess the credit worthiness of customers, conducting regular reviews to make sure that you’re dealing with the right type of customer.

There are a range of established business financiers in the UK that provide funding and collection support to SMEs, helping to negate the impacts of late payment. The type and level of funding required will depend on your business sector; the number of customers you have, how long your customers take to pay and how you operate. 

ABOUT BIBBY FINANCIAL SERVICES

Bibby Financial Services is the UK’s largest Independent Invoice finance specialist and a trusted provider of funding solutions to over 7,000 businesses.

Through our network of 19 local offices, we handle annual client turnover of £5 billion and since 2010, we have advanced more than £26bn to small and medium sized businesses throughout the country. 

Formed in 1982, we are a member of the Asset Based Finance Association (ABFA) and support businesses in over 300 industry sectors.

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Globally, we have operations in 44 locations, in 14 countries across Europe, North America and Asia, supporting more than 9,500 business customers worldwide.

In 2011, 2012, 2014, 2015 and 2016 the company was awarded a place in the Sunday Times 100 Best Companies to Work For, ranking 31st in the most recent poll.

We are supported by our parent company, the 208 year-old Bibby Line Group, a business-to-business services group involved in logistics, shipping and ship management, floating accommodation, hydrographic survey and geophysical services, offshore project management, retail, woodland burials and construction equipment hire. 

The company was founded by Liverpool entrepreneur John Bibby in 1807 and has its head office in Duke Street, Liverpool.

OUR PRODUCTS AND SERVICES

We help businesses unlock working capital for a range of scenarios, including cashflow funding, new equipment purchase, growth and expansion, management buy ins and buy outs, refinancing, corporate restructuring and mergers and acquisitions.

Our range of financing options includes:

  • Invoice Finance
  • Factoring
  • Lease Finance
  • Export Finance
  • Trade Finance
  • Specialist finance for the construction and recruitment sectors
  • Foreign Exchange