Printing businesses have decided enough is enough and are trying to put an end to the issue that’s been plaguing the industry for a while now. Late invoice payments are not unique to print-based companies but have heavily affected them in recent years.
A study conducted by Market Finance into the late payment of invoices across UK SMEs shows that the manufacturing companies, including printing, experienced late payment on 57% of invoices throughout 2020.
The report, which investigated 100,000 invoice payments, additionally discovered that even though the quantity of late payments seems to have diminished from the previous year (39%) contrasted with 2019 (43%), the period of time organisations are left waiting past their agreed terms, commonly 45 days, has multiplied from 12 days to around 23 days.
As indicated by the financial company’s discoveries, the quantity of invoices with long payment terms, from somewhere in the range of 60 and 120 days, being paid late nearly doubled between 2013 and 2020. Ascending from 13% being paid late in 2013 to 23% in 2020.
The investigation likewise uncovered that a faltering £34bn worth of late payments is owed to UK SMEs, which works out at around £34,286 per business venture.
Late invoice payment problems
Businesses all around the world continue to struggle, with 54% of businesses waiting on late payment of invoices as a result of the Coronavirus pandemic. This will likely lead to furthered growth and development in the e-invoice market, which gives businesses and customers alike a more convenient outlet.
What has been said?
The Launceston-based KCS Print managing director Zoe Deadman has shared her thoughts on the matter at hand. She said that late payments influenced organisation’s capacity to offer the best prices as time is often squandered in pursuing late payers. Here is what she had to say:
“We take a tough line,” she stated. “As an SME we don’t have the resources to spend hours chasing companies to fulfil their side of the contract. Instead, we dedicate our time to working with responsive companies that share our values and want to develop a mutually beneficial relationship. Thankfully there are many still around.”
Continuing: “Unfortunately it is the largest companies that are often the worst, using their buying power to try and push the terms and then going beyond them. Often when you stand by your terms of business you earn more respect than caving in to demands for 60- or 90-day payments. It is our duty to protect ourselves from these pressures.”
A year ago, the government proclaimed in its Spring Statement, recommendations for handling late payments to small business ventures with new prerequisites for huge firms to distribute their payment practises in yearly reports and to select non-executive directors with obligation regarding decreasing late payment to smaller suppliers and providers.
Is there any help on offer?
The Forum of Private Business (FPB) has distinguished that printers are battling with cash flow problems and credit control methods. The businesses support association has assembled a credit control pack in a bid to help organisations.
The pack incorporates hints, tips and guidance on how private companies can deal with their credit needs from being paid on schedule to getting to outside finance.
Robert Downes, spokesman for the Forum, said, “It’s common knowledge that the print industry is unfortunately used to rather long payment times from their customers, so we’re fairly sure our guide can help some printers shrink those down a bit, and give them a good steer for future contracts. We know cash flow remains a huge barrier to growth, and late payment is a persistent problem.”
There are financial solutions to be utilised
The financial solutions currently available to printers are luckily wide and varied. Invoice Factoring is a way for UK based companies to raise cash by selling invoices owed to your business to a third-party factoring organisation at a discount.
Factoring typically incorporates your own accounts receivable credit control, this is the place where the moneylender pursues neglected invoices on your behalf. UK factoring companies help discharge cash from your debtor book.
Invoice Factoring in the UK is the place where a factor or moneylender purchases all or a portion of your extraordinary solicitations. The lender will then, at that point, advance you up to 90% of their worth and reimburses you the excess sum, short a commission in addition to revenue on the development when the records are settled. The total sum a factor will advance will rely upon the standing of the debtor.
If you require any further information on how invoice factoring could help to save your print-based business, do not hesitate to get in touch with us today. A member of our expert team will be able to guide you towards the perfect solution for your print-based business’ financial difficulties.