Late payments reach record levels
November 4, 2011
According to figures released by payment company Bacs, the amount of money owed to small firms has reached a record three year high with the cash owed to companies by their customers standing at a staggering Â£33.6 billion â€“ an increase of 10 per cent on last year's record figure.
â€œJust when we were hoping it wouldnâ€™t get any worse for small companies, it just has,â€ says Luisa Grey, Director of Eazipay, one of the UKâ€™s leading Direct Debit processing companies, adding: â€œIt seems that the worst culprits are large organisations who are keeping their creditors waiting an average of 28 days longer than their payment terms before their invoices are settled.
â€œThe financial pressure coupled with the emotional stress can become intolerable with small companies being forced to slash their overheads in order to stay afloat â€“ even though there is nothing fundamentally wrong with their businesses. Itâ€™s a reaction brought about purely by being paid late.â€
According to the data, SMEs are owed around Â£39,000 each and some are being kept waiting as long as two months before being paid which not only impacts on vital cash flow buy makes business planning a near impossibility.
â€œThe issue of late payments coupled with the banksâ€™ reluctance to open their vaults means that small companies â€“ which really are the lifeblood of the economy â€“ are being squeezed unfairly, especially at a time of national and international economic uncertaintyâ€, adds Luisa.
NOTES TO EDITORS
About Eazipay Ltd
- Established in 2002 by local entrepreneurs Kathy and Ron Bradney, and their colleague, Luisa Grey, Eazipay Ltd has become one of the UKâ€™s fastest growing Direct Debit processing companies.
- Eazipay now provides regular Direct Debit services to over 650 companies in a wide range of market sectors throughout the UK, Europe and beyond.
- In March 2011, Eazipay recorded its best ever month for Direct Debit collections when Â£9.8 million worth of Direct Debits were processed on behalf of its clients.
- Eazipay was recently awarded â€˜Affiliateâ€™ status from Bacs, the governing body for Direct Debit processing in the UK payments industry. The company is now a member of an exclusive group of 38 other Bacs Affiliates, which includes representatives from some of the UKâ€™s leading businesses, banks and building societies, as well as government organisations and banking technology providers.
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