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How to stop private sector late payment

Great news about public sector late payment: the government is introducing legislation to ensure all public sector supplier contracts are settled within 30 days. But what about the private sector?

That’s where invoice finance comes in. The government’s decision to regulate against late payment in the public sector is obviously very welcome and will improve cashflow at SMEs. The new rules apply to both central and local government contracts.

However, private sector late payment remains a major challenge for small businesses – just look at the new figures from Bacs – and a leading reason why so many still struggle with cashflow, which in turn is an obstacle to development and growth. Invoice finance is an answer to this problem.

The idea of creating a Stop List has made the business news pages recently, but such a move should be approached with caution. Maintaining good business relationships is vital and guarding against heavy-handedness is important. Furthermore, how many SMEs can afford to simply dismiss contracts because a client has had some late payment issues? The truth is always more nuanced.

Invoice finance offers a way of avoiding late payment problems and the impact on cashflow while safeguarding business relationships. The use of a third party helps maintain professionalism and ensures you receive the money that your company needs to operate smoothly and successfully.

The government has put measures in place to tackle late payment in the public sector and now it should set its sights on solving the problem in the private sector once and for all. Invoice finance is part of the solution.

To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk.

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