SmartDebit responds to study on the effects of late payments to small businesses
Surrey-based SmartDebit, has responded to a new study by Bibby Financial Services showing the effects of late payments on small businesses in the UK.
(PRWEB UK) 4 January 2013
The study conducted by Bibby Financial Services involved 1,000 small and medium-sized businesses. It revealed that business performance is being hampered by poor cash flow and late payments. SmartDebit provides an end-to-end Direct Debit service, from consultancy to implementation, account management, processing and contingency.
The study reveals that a third of UK firms have 20-30 per cent of their invoices constantly overdue, which is making the day-to-day running of their business challenging. Research from Bacs also showed that 35 per cent of small and medium sized businesses reported that they would go out of business with late payment debts of just £20,000.
The research also reveals that small businesses rarely receive their payments on time, with 20.9 per cent of firms having to wait a further month past payment due dates until they receive the monies owed. Not only are small businesses suffering from late payments, 28 per cent are spending four days or more every month pursuing owed monies, which is affecting their productivity, performance and growth prospects. The study concluded that 37 per cent of SMEs consider the issue of late payments to be a major challenge to the growth of their business.
David Postings, UK chief executive at Bibby Financial Services said, “Instead of squeezing SME growth, companies should look at ways of better supporting their suppliers, such as adhering to prompt payment practices and following agreed processes, as outlined in the Government's Prompt Payment Code (PPC).”
A spokesperson from SmartDebit commented, “This study is yet another indication of the continuing problem with late payments amongst Britain's smaller businesses. At SmartDebit, we have noticed the number of companies using our service to collect via Direct Debit for business-to-business payments has risen steeply in the past few years. Our service gives our clients the ability to control when to take payment from their clients, and channel the time and resources that would normally be used to chase outstanding invoices into other areas of their business.”
SmartDebit is the UK's leading Direct Debit Bureau, specialising in payment processing services since 1998. A Bacs approved Bureau, scoring ‘Excellent' in all five categories of the Bacs audit, and ISO 27001 compliant. Providing a complete range of services: Outsourcing; SmartDebit-Admin cloud based portal; SmartDebit-Online payer sign up; SmartDebit-API integrated solution and SmartDebit-Contingency.
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