Financial software firm XERO issued the research, which revealed that:
Over half (52%) of UK business owners worry about unpaid invoices
Worst affected regions found to be London where businesses spend 1.5 days per month chasing payments, followed by 1.3 days by businesses in Wales
The business sector spending the most time chasing payments was found to be HR (3 days), followed by IT & Telecoms (1.8 days) and Manufacturing & Utilities (1.7 days)
It also showed that the two main reasons cited by small business as being the causes of late payments were that their customers were also waiting for payments themselves (32%), as well as a lack of consistency on payment terms (27%). In response to the growing concern over late payment of invoices, the company has produced a music video to showcase the frustrations felt by ordinary small firms when faced with late payers.
To get paid faster why not include a pay now button on your invoice
A new way to pay is coming this month, its called PAYM and it will be available from the 29th April.
Customers of the following banks can now register to link their mobile number with their bank account: Bank of Scotland, Barclays, Cumberland Building Society, Halifax, HSBC, Lloyds, Santander and TSB.
Other banks – including NatWest, RBS and First Direct – will join the scheme later in the year.
People who wish just to receive money – as opposed to paying it – will still be able to use the system, even if their phone is not a smartphone, or they do not use mobile banking.
To send money, a user will have to log into their bank’s mobile banking app, using a pass code as normal.
They will then have to select the recipient of the payment, using their existing contacts or by typing in that person’s mobile phone number.
After confirming the name of the recipient, they will have to check the amount being paid, type in a reference for it (such as “dinner”), and then press send.
Having a good credit score is essential in the current economic climate, your credit score will be checked by Customers, Suppliers and Banks/Lenders, so how can you improve your score?
1. Pay your bills on time – many credit rating agencies (Dun & Bradstreet, Creditsafe, Risk disk to name a few) now collect payment data from your suppliers every month and update your score, often showing days beyond terms (DBT), if you have a dispute with a supplier try to resolve it quickly as it could affect your credit score.
2. Don’t make multiple applications for credit – credit searches by lenders leave footprints on your credit file and could make it look like you have cash flow problems.
3. File your accounts on time – late filing can really hurt your credit score, sometimes it can reduce your score by 50%.
4. Avoid CCJ’s – Getting a judgement against your business even for a small value is extremely damaging to your score.
5. Retain Profit – this increases net worth and shows you are investing in your business.
6. Record Borrowing Terms – in your published accounts and notes makesure you explain the terms and split the loan between short and long term, if all your loans are shown as short term this will damage your score because it will impact on working capital.
7. Review Share Capital – if you have directors loans that you have made to the business and you aren’t expecting repayment in the near future convert them to Share Capital, this will increase net worth.
8. Keep Credit Card Balances below 30% – Its bad for your credit score to max out your business credit card and its also bad to have too many business credit cards, it makes your business appear desparate for cash.
9. Avoid Negative Net Worth – it can wipe out your score.
10. Fix any mistakes – if a credit score is wrong and contains errors speak to the credit agency and get it fixed.