A powerful business alliance has combined with a new pressure group to finally put an end to the curse of late or slow payments to SMEs.
Good Business Pays is spearheading an alliance involving the Small Business Commissioner, the Federation of Small Businesses (FSB), the Confederation of British Industry (CBI), and the British Chambers of Commerce (BCC), to stop slow payments from harming small businesses once and for all.
What is the aim of the alliance?
Good Business Pays campaign was launched in May 2021 to encourage the UK’s largest companies to fast track payments to small suppliers, helping them bounce back from the COVID-19 pandemic and injecting vital capital into the economy.
The group has launched the “Wait Off” campaign and is backed by 16 of the UK’s most influential groups – representing a total of over half a million businesses in the UK.
How will the campaign work?
The campaign is also backed by several UK businesses that support faster payments to small businesses.
The industry-wide initiative will combine a mix of digital advertising, social media, PR and lobbying of key stakeholders, including the government, to focus on the most important drivers in changing behaviour towards payments across UK businesses.
A study commissioned by Good Business Pays and carried out by the Centre for Economics and Business Research (CEBR), estimates that if small businesses’ invoices were paid on the day they were submitted, their revenues would increase by £40bn to £60bn per year.
While the campaign gathers pace, businesses can still find ways to mitigate the effects of late payments by:
Agreeing to clear payment terms
Make your payment terms clear to your client – this should be in writing, ideally in the form of a contract.
Keeping payment terms short
The payment term that you set should be as short as possible but be realistic. If you want to be paid in 30 days, you have to set your payment terms at around 14 days.
Invoice the firms as soon as possible
Invoicing should be a priority in any business, so get them out as soon as possible
Make sure your invoice is accurate and easy to understand
Queries delay payments. Avoid queries by making sure your invoice is accurate, straightforward and contains all the correct information – including the purchase order number.
Follow up with phone calls
Nobody likes making these sorts of calls, but they are essential if you want to get paid as quickly as possible. Call early in the day, call often, but always remain polite and professional, but firm.
The “Wait Off” campaign is calling on small businesses to sign up and add their voices to the movement. To find out more visit https://goodbusinesspays.com/wait-off-campaign/.
Need help and advice on coping with late payments? Contact our experts today.