There is a financial issue that has been plaguing U.K. small businesses long before Brexit came to haunt the space. According to collections company Crunch, late payments are U.K. micro-businesses’ largest problem, surpassing the challenges of cash flow management, recruitment and finding office space.
Crunch’s conclusions were released Monday (June 27) in conjunction with the rollout of its latest service aimed at tackling the micro-business late payments problem.
Dubbed Crunch Collections, the new tool provides freelancers, contractors and small business owners a way to track down outstanding and overdue invoices. Crunch Collections enables these companies to get paid faster, and the firms only pay Crunch for its services if the invoice is eventually paid off.
“The culture of late payments is now well and truly out of control – and the people bearing the brunt of the issue are the country’s smallest firms,” said Crunch CEO Darren Fell in a statement. “We regularly hear from micro-businesses who are in dire financial straits, simply because they are waiting on an invoice with 90 day or more payment terms from a huge company.”
The solution is immediately available to small businesses and, according to reports, does not require contracts or charge hidden fees.
Late payments in the U.K. have received considerable attention from media outlets, industry groups and the government. While late payments are seen to cause financial ruin in many cases to small companies, new analysis from PKF Cooper Parry found that some companies are taking matters into their own hands by cutting ties with business partners that pay their bills late.
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“Improved market conditions, as well as the necessity for businesses to manage their cash flow more effectively, means that a number of SMEs now feel confident enough to talk away from deals with late payers,” said PKF Cooper Parry Director Ross Cocker in a statement last February.
