The Autumn Budget is coming in just under a month’s time and it will likely bring with it notable changes to the current economic climate.
However, it is important that ongoing issues are not overlooked as attention turns to the Chancellor’s plans and announcements.
Late payments are holding back UK SMEs and it is vital that this issue be addressed to ensure that they can remain economically agile and able to deal with any future challenges.
What steps can small businesses take to prevent the problem of late payments?
The problems caused by late payments can escalate rapidly, so it is best to tackle them as early as possible.
In many cases, this can be achieved by clearly defining expectations in the contractual stage.
Payment deadlines should be clear and understood by all parties involved and the measures that will be taken should the payment be late need to be clarified.
In most cases, this will involve charging interest on any payments that are made after the deadline passes.
However, many SMEs find success by taking a more positive approach to handling late payments.
Rather than punishing late payments, some businesses reward early payments by offering small discounts if payment is made before the deadline.
This can be a way to improve rapport within the working relationship and is worth considering if previous approaches to late payment management have been unsuccessful.
The Association of Chartered Certified Accountants (ACCA) found that 35.6 per cent of UK SMEs reported problems with securing prompt payment, so you should get advice from a trusted accountant on how to find the best solution for your business.
What support do accountants offer with managing late payments?
We can help you to approach the problem of late payments from a few different angles.
We will help you to set clear payment deadlines and manage the assignment of interest effectively if that is the option that suits you.
Alongside tackling the problem head-on, we can help you get a better grasp of your financial situation so that the effects of late payments are felt less keenly.
To keep your cash flow healthy, it is best to explore other funding avenues so that there is enough money coming into your business to address any issues with payments.
As the Autumn Budget comes ever closer, we all need to be preparing for economic upheaval and taking positive steps to strengthen cash flows and secure financial health.
In some cases, where customers and clients are consistently late with payments, it may be necessary to sever the working relationship and turn your attention to those who are more dependable with payments.
We want to see your business succeed and tackling late payment problems can be an effective way of achieving this.
Speak to our team today for expert support in managing the problems of late payments.