Running a company is hard enough without having late payments to deal with. Tardy payments can significantly affect businesses’ cash flow, and in the worse cases they can make it impossible for organisations to carry on trading. To help avoid payment issues, firms can take advantage of the relevant document templates. It is now easier than ever for enterprises to access these resources. By heading online, bosses should be able to find all the documents they need in no time.
Waiting more than 90 days: New figures released by Sage UK and Ireland suggest that over half of small businesses (57 per cent) have waited for more than 90 days to receive payments owed to them in the last six months. Of nearly 600 business owners polled by the firm, one in ten (11 per cent) said they had suffered major cash flow problems as a result, while 33 per cent revealed they have experienced minor cash flow issues due to late payments.
Delayed payments are also having knock-on effects, with 14 per cent of enterprises unable to pay their own suppliers and 2.5 per cent of companies paying their staff late.
Worst offenders: Big companies appear to be the worst offenders. Nearly half (45 per cent) of respondents said this was the case. Meanwhile, 16 per cent of the businesses owners polled said small firms were the main culprits, while 13 per cent identified public sector organisations and eight per cent pointed to individuals.
Prompt Payment Code: When asked about the Prompt Payment Code, which was set up by the Labour government in 2008 to help tackle the problem of late payments, only five per cent of respondents said it had been ‘effective’ or ‘extremely effective’. In contrast, 38 per cent said it was ‘ineffective’ while 16 per cent claimed it was ‘extremely ineffective’. The remaining 41 per cent had not even heard of the code.
Clamping down: Responding to the findings, Lee Perkins, managing director of Sage UK and Ireland’s Start-Up and Small Business Division, said: “It’s time for the government to roll up its sleeves and get on with clamping down on the notorious late payers which are starving smaller firms of cash flow.
“British businesses have given a damning verdict for the Prompt Payment Code, which has proved toothless and ineffective. There has been plenty of rhetoric, but not enough action and firms are saying they are fed up. 30 days is long enough, but it’s absolutely criminal that the majority of firms experiencing late payments of sixty, or even ninety days.”
A proactive stance: To help minimise the chances that they will suffer as a result of late payments, firms can take advantage of a range of legal documents. For example, they can access templates for documents concerning repayment terms. Having clear agreements in place with third parties is vital. Bosses can also access statutory demands, repayment letters and notices of legal action.
By heading online, managers can take their pick from a host of templates that can make their jobs easier and help to protect their firms from the ill-effects of tardy payments.