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Weekly Short
15 March, 2024
Late payments are a real pain for small businesses. Over a quarter of UK small companies are stuck waiting for cash from their customers. And if you don’t have large cash reserves, late payments can be catastrophic for business viability. And it doesn’t seem to be getting any better – more than half of these businesses say late payments were on the rise all through 2023.
A recent research report from Good Business Pays (no relation) points to large companies including Coca-Cola UK, Formula One Marketing, AB InBev, Mondelez and Reckitt who are deemed to be slow payers, with companies listed in the report taking an average of 110 days to pay invoices.
It’s not just about the money, though. Think of the time wasted – around a third of these suppliers say they are spending up to a whopping 30 hours each month just chasing up payments. That’s a lot of precious time lost that could have been put into growing the business.
Meanwhile, companies like NatWest Group (client of Good Business and prompt payer of our invoices!) are showing everyone how it’s done. While NatWest’s standard payment terms are still 30 days, since the pandemic they’ve been paying up right away when they get invoices for goods or services, taking only about a week to sort it out. They’re not just keeping this good practice to themselves, either – they’re telling their suppliers to do the same through their Supplier Charter. Their efforts mean they’ve been recognized for approach, winning a Fast Payer Award from Good Business Pays three years in a row.
Bigger firms shouldn’t get away with short-changing suppliers, particularly while championing responsible business efforts and good citizenship in other areas. Let’s take a leaf out of NatWest’s book and make sure we’re all paying up on time. It’s good for business, and it’s just the right thing to do.
By Bertie Bateman