Outstanding debts to the country’s small and medium-sized businesses have reached a high of £35.3 billion – that’s an increase of almost £2 billion on the last reported figure from six months previously, and the largest overdue amount measured to date, according to new research from Bacs Payment Schemes Ltd (Bacs).
The company behind Direct Debit and Bacs Direct Credit found that the average amount owed to SMEs stood at £45,000 at the end of 2011, up from £39,000 earlier in the year. And despite the proportion of SMEs experiencing late payment having fallen (down to 785,000 from 861,000), their combined debt is now bigger than ever.
In addition, businesses are waiting longer for their invoices to be settled. In the second half of 2011, SMEs said they were waiting on average 29.6 days longer than agreed payment terms, an increase over the 28-day delay reported in the first half of 2011.
And it appears that big businesses are still, in the main, those least likely to pay on time as more SMEs (41 per cent) say they are the ‘worst offenders’ compared to private companies, individuals, other SMEs and government departments.
Mike Hutchinson from Bacs says the increasing value of late payments and the extended terms that many SMEs are now experiencing, highlights the important role that automated payments can play in maintaining a smooth cash flow.
“Our research highlights the challenges faced by many thousands of SMEs in chasing payments from customers and maintaining a healthy cash flow which is the life blood of any successful business,” said Hutchinson.
“We would always recommend that anybody running a business ensures that as many regular payments as possible are automated in order to maintain financial control. This will reduce the stress and financial cost of chasing payments for business owners.
“Ultimately it is an issue for businesses of all sizes to address as prompt payment is not only good for the individual businesses involved in any given transaction, but throughout the whole supply chain.”
Philip King, chief executive of the Institute of Credit Management, says: “Although disappointing it is no surprise that the volume and value of late payments is rising and shows that the Government (through the department of Business, Innovation and Skills – BIS) is right to be prioritising ‘late payment’ as a key focus of resource.
“Larger companies must do more to pay their suppliers on time, and be obliged to sign up to the Prompt Payment Code (PPC); Government should also take the lead by only awarding public sector contracts to those firms who are part of the Code and can demonstrate a genuine commitment in this area.”
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Recent news shows businesses with unpaid VAT are severely at risk of having business assets seized by HMRC.
In the last 12 months 2,401 businesses have had assets seized to pay unpaid VAT. They simply turn up and repossess assets the loss of which could be vital to their trade. These assets will probably fetch a fraction of the the true value of them when sold under stress.
VAT payments for accounting period ended 31 March 2012 must be paid by 7 May which is the Bank Holiday Monday. The ‘Time To Pay scheme’ is less likely to be allowed by HMRC.
If you are a business in this situation owing VAT Ashley may be able to help with invoice finance or business cash advance products to help the business pull through.
Don’t let your business be subjected to these tactics in a tight cash flow period ask for quote, you can ask us for a free callback, phone us, email us or go to our short online form to start the process which can be handled in 48 hours giving you vital space to trade.
We understand the pressures put on small business, not helped by withdrawal of vital cash support by our banks who are risk averse.
Ashley Commercial Finance “the friend of small business” in England and Wales.
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First of all I would like to thank you very much for the excellent work that you did last week. I didn’t at first believe your claims that the facility could be put in place so fast but was amazed that you in fact managed to do it. I was very impressed.
Regards
For privacy the name and company details are withheld but can be supplied on request.
We helped a West Midlands business which provides CERT funded grants to completely cover the cost of having loft insulation and other efficiency measures professionally installed in the home. Our customer gave us an A+++ for our fast service, can we help your business speed up your cash flow, while the banks say no.
Ask for a free callback, send us the form or phone during working hours for our fast friendly service, we understand the needs of small business and are known as ’the friend of small business in good times and bad, we are the SECONDBESTINVOICEFINANCECOMPANY IN THE UK.
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I came into my agreement with Ashley Commercial Finance with a degree of reticence and worried about how things would pad out. I have to say my multi-national client has made a series of errors that has tested our relationship. However, I have to say that Jayne Merriman was a huge credit to your company even taking the time to write to me in detail at 8 pm because she knew I was worried. That kind of extra commitment is rare in this world especially for such a small customer as me and she deserves credit.
I do genuinely think you are trying to help me and that is excellent, shame the banks can’t do more to stimulate our world. I have already referred this story to a much bigger customer and I think he will come and use you. I also offer to act as a reference to anyone who wants to phone me on the mobile below or by email.
Kind regards
For privacy the name and company details are withheld but can be supplied on request.
Ask for a free callback, send us the form or phone during working hours for our fast friendly service, we understand the needs of small business and are known as ’the friend of small business in good times and bad, we are the SECONDBESTINVOICEFINANCECOMPANY IN THE UK.
If you need help ask for a free Callback or click the Livechat link above during working hours or contact us directly for an initial discussion:
I have been asked to provide a reference for Ashley Commercial Finance in regards to their Merchant Cash Advance
At the end of last year, when we found ourself in need of a cash injection and unable to borrow from our bank, we turned to Ashley Finance as we had a merchant service and hoped to obtain an advance against our future card sales.
The repayment arrangements were based on our current card sales, which has ensured that we are able to repay the amount we borrowed without a detrimental effect on our business.
We have been very pleased with the quick way in which the company made the funds available to us, and we now receive regular and correct payments direct to my main back account from the holding account that our merchant funds are directly paid in to.
The system is not only working for us, but if we had turned elsewhere, our repayments would have been greater as would the interest.
I am pleased that the system is now in place, and that should we wish to in the future, we have the option to borrow again against these future payments, as and when we need it.
Contact Colin Samuels for further information or to start an application
Email: colin.samuels@ashleyfinance.co.uk
Phone: 0161 233 6376
Ashley have launched a simple to set up cash advance service for Beauty Salons, Chiropractors, Dentists, Hairdressers, Opticians, Pharmacists, Veterinarians and any other retailer who utilises a PDQ terminal. Repayment is made from your current PDQ terminal, no need to face the hassle of changing to another supplier. Cash advances up to £25k can be made paid back over a period usually of six months in variable amounts to suit sales, and you can extend your loan at any time. No risk to your assets and no early settlement fees.
What can you use the cash for?
You can use the the cash for any business need whether that is working capital, opening additional locations, renovation or refurbishment of your premises, equipment purchases, marketing and advertising bills, additional stock purchase, PAYE, VAT, wages or any other business need you may have.
We like to say yes unlike high street banks such as Barclays, NatWest, Lloyds TSB to name just a few.
Start an application online, phone us or request a free callback and receive funds within 10 days. Check your business is eligible on our web site.
To help ease the pressure on small businesses in England and Wales we have launched 100% funding. Banks continue to starve small businesses of funding which enables their day to day running in very difficult conditions.
Ashley take care of chasing the people who owe you money and help to speed up slow payers. When your sales invoices are approved you will receive 100% funding to your bank account enabling you to pay yourselves, buy in stock or essential supplies and run your business knowing you have our service looking after the cash side freeing up your time to look after the work end and chase new customers.
Ask for a free callback, send us the form or phone during working hours for our fast friendly service, we understand the needs of small business and are known as ’the friend of small business in good times and bad, we are the SECONDBESTINVOICEFINANCECOMPANY IN THE UK.
If you need help ask for a free Callback or click the Livechat link above during working hours or contact us directly for an initial discussion: