Small businesses suffer £35billion late payment headache | Eazipay Direct Debit News
 

 

Small businesses suffer £35billion late payment headache

June 5, 2012

“Why is it that SMEs, which are the lifeblood of the economy, are being left to sink or swim as money owed to them soars to record levels,” says Luisa Grey a Director with Cambridgeshire-based Direct Debit processing company, Eazipay Ltd.

Figures released by Bacs, the organisation which runs the electronic processing system for financial transactions, have revealed that once again SMEs are bearing the brunt of late payments with a total of £35.3 billion being owed to them.  Alarmingly, that’s a £2 billion increase on last year’s figures.

“These figures mean that on average, SMEs are owed £45,000 each, levels which cannot be sustained and which must be sending companies into receivership”, adds Luisa. “It’s a national scandal and it needs to be addressed by Government action, not sincere sounding platitudes and sound bites.”

“Of course SMEs can greatly increase their cash flows and reduce their debtor days by having their customers make regular payments by Direct Debit, and we have hundreds of clients doing just that.  But it shouldn’t be left to SMEs to fight this battle alone, particularly as, in the main, its large companies (41%) which are the principle culprits.”

The latest data paints a clear picture that SMEs are finding themselves caught between a rock and a hard place.  On the one hand, SMEs seem afraid that if they put too much pressure on large customers they may lose valuable contracts, however, if they don’t chase for what they are owed, they find themselves starved of cash.

“The Prompt Payment Code, whereby companies who sign up to the code commit to paying their suppliers within agreed terms, should be given real teeth and the Government should take the lead by only awarding its contracts to firms that have committed to it and who are prepared to make their payment terms public”, says Luisa.

“A trend seems to be developing where customers, particularly larger companies, are treating their suppliers as an extension to their bank and holding back on making payments as a way of increasing their own cash flow. The Prompt Payment Code would go a long way to restrict this and ensure that the situation doesn’t escalate further for SMEs.”

Eazipay, which is based in Littleport, Cambridge and employs 21 full and part time staff, provides regular Direct Debit services to over 800 companies in a wide range of market sectors throughout the UK, Europe and beyond.

On Wednesday 11th July 2012, the company is hosting an ‘Avoiding Late Payments’ breakfast workshop, which is designed to give SMEs all the tools and tips they need to protect their business from the scourge of late payments. For further details visit www.eazipay.co.uk/avoiding-late-payments.


- Ends -

 

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 UK’s fastest growing Direct Debit processing companies.

• Eazipay now provides regular Direct Debit services to over 750 companies in a wide range of market sectors throughout the UK, Europe and beyond.

• In Febraruy 2012, Eazipay recorded its best ever month for Direct Debit collections when £19.3 million worth of Direct Debits were processed on behalf of its clients.

• Eazipay was recently awarded ‘Affiliate’ 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 UK’s leading businesses, banks and building societies, as well as government organisations and banking technology providers.

For further press information, please contact:

Damion Clark at Real PR (Consultants) LLP.
Tel: 07789 911314
Email: damion@realpublicrelations.com

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 

Eazipay Limited are authorised and regulated by the Financial Conduct Authority, number 615816 under the Payment Services Regulations 2009 for the provision of payment services. www.fca.org.uk
The Financial Ombudsman Service (FOS) is an agency for arbitrating on unresolved complaints between regulated firms and their clients. Full details of the FOS can be found on its website at www.financial-ombudsman.org.uk

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