A universal culture of prompt payments need to be adopted across the UK to help businesses help themselves, according to business body the Confederation of British Industry (CBI). Currently more than £30billion is owed to UK enterprise, with each business owed on average £31,000. But despite this being down on the £36billion reportedly owed in January last year, further steps could be taken to reduce the impact of the issue on the private sector. With the economic recovery in the UK now in full swing, the CBI has said that small businesses and SMEs would benefit from having positive cashflow to enable them to grow and prosper. The following recommendations were made by the CBI:
- All businesses should publish payment policies
- Maximum payment terms
- 'Upper tier’ or gold standard for companies part of the Prompt Payment Code, for businesses that pay in even shorter time frames
- Utilisation of online finance platforms by big businesses
- Clearer definition of terms in contract law, giving small businesses greater confidence when negotiating payment terms
CBI’s Director for Competitive Markets, Matthew Fell, said: “Most companies agree and stick to fair payment terms but we need to create a culture of prompt payment in all businesses.” “It’s unacceptable that many firms are being held back from growing and creating jobs because they are owed thousands of pounds”, he concluded.
Invoice Finance for Cashflow Assistance
Is your business suffering from late payment culture? Could your cashflow be a lot healthier if debtors paid quicker? Invoice finance facilities, such as invoice factoring and invoice discounting, are specially designed to help cater for the problems caused by late payments. With an invoice finance facility, we provide you with cash upfront for your invoices, with some facilities also providing your business with a credit control team to help chase payments and ensure debtors settle invoices quickly.Why not browse our website to find out a little more about how invoice finance works, or give our team of experts a call on 0845 602 9354 for a chat and no-obligation quote.