NEW research published this week found that Yorkshire’s Small and Medium Enterprises (SMEs) were the UK’s worst-off in what is being branded “a crisis of slow and late payment”.
No fewer than 80% of small businesses reported issues with slow payment of invoices – with 41 days is the average time it takes an SME in Yorkshire to be paid. This is 11 days after the recommended maximum of 30 days. Statistics show that as many as four-in-ten small businesses fold in the first five years with poor cash flow blamed as the largest contributor.
The spotlight on slow payment of invoices shines fiercest on large businesses, which have the benefit of favourably-drafted standard terms and conditions, wedded to high bargaining power and leverage in negotiations. Supermarkets are serial offenders on this score, often stipulating up 60 days for payment of their SME suppliers.
The problem is compounded by SMEs making outgoing payments on far less-generous payment terms. Additionally, large businesses take advantage of the fact that SMEs are far less likely to pursue debts which are paid late due to lack of resources and knowledge about the methods. This continues to create difficulties for SMEs in what is already a highly uncertain landscape despite previous legislative attempts to get a handle on the situation.
Milners is trying to be part of a SME-driven solution to this ongoing problem.
As a Yorkshire-based SME, with offices in Leeds, Harrogate and Pontefract, we are all too familiar with slow payment of invoices. However, unlike most SMEs we have the benefit of legal expertise in these areas. Whether your business needs assistance negotiating the terms of a new contract or you require debt recovery help pursuing overdue invoices, Milners is here to help level the playing field.
Should you have any questions or concerns regarding developing new client contracts to minimise slow payment, debt recovery, or any other business-related issues, please do not hesitate to contact this article’s author, paralegal Nathan Watts, a member of our Corporate and Commercial team here at Milners on 0113 245 0852 or email us at hello@milnerslaw