Partner Article

Festive season heralds late payments for SMEs

The coming weeks could be difficult ones for businesses awaiting payment, as high numbers of customers delay expenditure until the New Year.

With many distracted by bad weather, lower productivity, parties and holidays, December invoices are often ignored until mid-January, often leaving businesses with serious cash flow issues.

It is a particularly serious issue for SMEs, many of which do not have vast cash reserves to fall back on.

Mark Green, head of debt recovery at Newcastle-based Short, Richardson & Forth believes that businesses should now take appropriate steps to protect themselves from non-payment.

He commented: “North East businesses of all kinds suffer at this time of year with the slowdown in payment by customers, and many businesses consider it to be unavoidable but that is not the case.

“Credit controllers should be contacting customers in advance of invoices falling due to remind them of the payment date and that they expect to receive payment on or before that date and
not after. “

He also recommends businesses issue a warning to their clients to ensure they are aware of the consequences of late payment.

He added: “Businesses should also consider warning commercial customers that a late payment will lead to compensation and interest being added to the debt in accordance with the Late Payment regulations.

“This is charged per invoice and can be substantial.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .