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Late payment of invoices is a big problem for many businesses with nearly 50% of
the invoices issued by small businesses being paid late.
The problem is having a devastating effect on many companies’ cash flow, with
the DTI estimating that at least 10,000 businesses fail each year as a result.
As a result, SME invoice finance specialists Ashley Commercial Finance has
produced a guide to help speed up payments for small business.
Richard Wilson, head of business policy at the IOD commented: “At any one time,
£20 billion is owed to UK businesses”.
"On average, invoices are paid 19 days late.
"The legal position is unequivocal. If you have agreed clear payment terms with
a customer who fails to pay on time, it is a breach of contract.
"However many firms don’t tackle the issue up front and many don’t have ‘cast
iron’ contracts".
Jayne Merriman, Operations Director at Ashley Commercial Finance added: “This
money from overdue payments should be sitting in the suppliers’ bank accounts.
"We have many clients who use our services purely because they don’t want the
hassle and don’t have the time to chase overdue debts.
"It is interesting to note that we are seeing more and more enquiries from this
type of company.
"The important factor that companies looking for this service must consider when
selecting their invoice finance provider is that every invoice needs chasing,
not just the handful of large customers.
"Ashley chases every invoice it deals with for a client. Invoice finance is fast
becoming the smart way to finance a business and is often a much better option
than an overdraft.”
Source:
Credit
Control Journal
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