Federation of Small Businesses research shows that 50,000 UK firms cease trading every year because of the late payment crisis, costing the economy £2.5 billion.
The Sunday Times* has reported that, in order to crack down on offenders, Paul Uppal, the UK’s small business commissioner, will this week unveil a new scheme where late payers, including repeat offenders as well as to those who don’t publish their payment terms, will be named and shamed using a traffic light warning system to identify them.
The new system will enable suppliers to make a more informed decision as to whether they want to work with the red flagged companies or not.
In December, it was reported that the cost to SMEs to collect late payments reached £6.7 billion in 2018, a 37 per cent increase on the previous year.
For support in structuring your business with cashflow and profit forecasting to measure performance and maximise opportunities, or to discuss ways of improving the free cashflow in your business, please contact Steve Govey or your usual Beavis Morgan Partner. Through our partner businesses, BM Structured Finance and BM Advisory, we are also able to help with sourcing and restructuring debt finance for SME businesses, as well as assisting with resolving issues which can impact on business performance and success, and finding innovative solutions for businesses and individuals in distress.
* Sunday Times, 6 January 2019: Traffic light system to identify firms on paying on time