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The late payment ripple effect

February 6, 2024

When it comes to running a business, the challenge of late payments is all too familiar. Recent data from NatWest Group unveils a harsh reality – 27% of UK SMEs find themselves grappling with unpaid invoices ranging from £5,000 to £20,000. Furthermore, over half (55%) have witnessed an uptick in late payments in 2023, with 31% investing a substantial 21-30 hours monthly to chase payments*. How does this affect businesses, and how can we tackle the challenge of late payments?

The hidden cost of late payments

Late payments extend beyond mere ledger entries; they cast a shadow that can hinder even the most resilient businesses. Cashflow issues, administrative burdens, strained customer relationships, and slow business growth are the collateral damage of late payments.

Digging a little deeper, late payments leave an emotional imprint. Stress and anxiety loom over business owners and AR teams. Motivation dwindles as the weight of financial uncertainty takes hold. Frustration and anger surface as the relentless pursuit of owed funds strains mental well-being.

Automate and elevate

To navigate the complexities of late payments, SMEs can empower themselves with improved AR strategies. Automate invoicing and reminders to maintain efficiency. Set clear payment terms ensuring a shared understanding between parties, and offer flexible payment options to accommodate the diverse financial landscapes of your clients.

In the pursuit of financial stability, SMEs can forge a path that avoids late payments. By embracing automation, clarity, and flexibility, businesses can safeguard against the impact of overdue invoices, and by reviewing your accounts receivables strategy and implementing more efficient practices, your focus can shift to business growth and success.

For more support on how you can make your AR process more efficient, contact us at hello@paycada.com.

*NatWest Group (2023) Two million of Britain’s small businesses fall victim to late payments.

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