The U.K. is focused on the problem of late payments, with policymakers stepping into support small and mid-sized businesses (SMBs) often paid late by their corporate customers. But new research from eProcurement and spend management solutions Wax Digital has uncovered with it described as a “double standard” in this space, finding that companies affected by late payments often don't pay their own invoices on time, either.
Reports by SmallBusiness.co.uk on Thursday (Jan 25) said the majority of U.K. businesses are demanding faster payments from their B2B customers, with nearly two-thirds of executives telling Wax Digital they have ended relationships with those that paid late. More than 40 percent said they were forced to delay paying wages due to late payments.
Yet, only 27 percent said they paid their own suppliers on time, and 69 percent admitted that they are habitually late when paying their own invoices.
But, Wax Digital said, late payments are the result of inaccurate, manual and inefficient B2B payment processes, more often than not, and are not intentional. Nearly one-third of survey respondents noted their lengthy invoice processing timescales lead to delayed payments, while more than one-quarter cited internal errors as the reason they pay late.
“While, in some cases, late payments is an unfortunate vicious circle caused by businesses simply not sticking to the terms of their contract, there are many times when it is simply the result of inefficiency,” said Wax Digital director Daniel Ball. “Poor invoicing processes don't just mean delays with money changing hands. They can also mean an end to carefully sourced supplier relationships and reputation, costing the business much more in many different ways. But they are very simple to solve, though the adoption of eInvoicing processes.”
Wax Digital researchers also found 88 percent of companies agree being paid without any financial errors promotes better working relationships, and 86 percent said the same about getting paid on time. More than three-quarters noted early payment discount options offered by their suppliers is important to their business.