There are many injustices in business, but the one thing that is responsible for holding back entrepreneurship is the late payment of invoices.
It appears that the bigger the client is, the longer they take to pay and the smaller the business, the longer it takes to get paid.
A recent poll carried out by YouGov on behalf of FreeAgent reveals that one in eight micro-business owners in the UK has had to wait a year or more to get paid by one of their clients.
Moreover, 13% of micro-business owners said they had to wait for at least a year before a client had settled an outstanding invoice, while 46% said that they had waited two months or more to get paid by a client.
Other salient points of the report:
* 86% of micro-businesses that issue invoices said they had been paid late, while only 14% said they had never been paid late
* 31% of respondents said they wait for a month or more after their payment deadline has passed before chasing up an unpaid invoice
* Only 28% said they would chase an invoice within the first week after it was due
The research, which surveyed more than 500 micro-business owners/sole traders and was carried out to mark FreeAgent’s £1 million crowdfunding drive through Seedrs.
“We know that it can be awkward to chase clients and ask them for money, but if you don’t follow up with late payers from the moment that their invoice is overdue, they may not see the urgency in paying you. And that means you may be stuck waiting for months – or in extreme cases even years – to get paid what you’re owed,” said Ed Molyneux, CEO and co-founder of FreeAgent.
On a personal level, and with hands firmly placed on wood, I am yet to be stitched up by a client or somebody who has commissioned me.
I am wired to call the accounts department the first hour after an invoice is late and am happy to shame these so-called clients on social media if they continue to stonewall me. It is in everybody’s interests for everybody to do the same.