Friday, September 30, 2011 2:48:00 PM
In the six months to July 67% of respondents to a regular Hilton Baird survey saw an increase in the time it took customers to pay invoices, typically to 22 days beyond agreed credit terms. 84% are now spending more time chasing customers than they were at the start of the year.
Late payment on this scale is simply not sustainable and sends damaging shock wages along the supply chain. The most common excuse was that customers own customers were delaying payment, making the cycle very hard to break and leading in some cases to business failure.
The payment gap is widest for small businesses with a turnover of less that £500K - those who can least afford it.Despite extending the lowest credit terms - typically 28 days compared to 33 days amongst larger companies - customers took an average of 51 days to pay, 23 days over terms, more than 6 days longer than their larger counterparts, thus creating major cash flow problems during already difficult trading conditions.
NFS can help - if your business is suffering because of late customer payment, discuss invoice factoring with us - payment for up to 85% of your invoice can be in your bank account one day after you raise it!