Late Payments Bring Summertime Blues to UK
Just as accountants experience a busy time of year during tax season, small- to medium-sized enterprise (SME) credit managers in the United Kingdom are finding their summers cut short to spend more time hunting down late payments. In fact, 60% of U.K. SMBs are exchanging summer holidays for more workdays dedicated to the task, according to Online Payments Company GoCardless.
On Aug. 14, Global Banking & Finance Review published an article about a recent GoCardless survey, which found that late payments increase substantially during the summer months for two-thirds of SME owners. While 20% of respondents spend three working days dedicated to late payments, 10% said they spend nine days.
"SMEs are the lifeblood of the U.K. economy and it's not right for them to be denying themselves valuable time to recharge their batteries just to chase late payments," Josh Sasto, head of partnerships at GoCardless, said in the article. "On-time payment is a right, not a privilege."
Furthermore, 57% of respondents who do take vacation said they will spend some of that time off addressing their customers' late payments.
FCIB's International Credit and Collections survey of the United Kingdom told a different story. According to July 2017 results, more than half of respondents said there was no change in payment delays, with nearly a quarter of respondents reporting no payment delays. Only 16% said payment delays were increasing, but that number dropped to 9% in the April 2018 survey.
"They will only typically pay at the end of the month or on the 15th of the month, and they will not typically pay invoices early to account for their internal processes," a 2018 respondent said. "As [with] anywhere, you always end up with some customers that have cashflow issues."—Andrew Michaels, editorial associate