Commentary: the UK’s late payment ‘crisis’

“This week’s figures from the Federation of Small Businesses (FSB) revealed late payments are continuing to trouble the small business sector which could well lead to serious consequences for the UK economy. With the need to pay wages, rent and cumulative Bounce Back loans already weighing heavy on business owners, it’s imperative that every organisation adheres to the prompt payment code in order to keep UK businesses buoyant in 2022 and beyond.

“While today’s assertion from the small business minister, Paul Scully, that this could be the year London “bounces back” from the pandemic will undoubtedly go some way to instil confidence amongst some business owners, there’s more work to be done to ensure small enterprises right across the country remain operational by the time restrictions are lifted. For SMEs already relying on a surge in consumer demand in the new year to bump up their bottom line, it’s more important than ever that those business owners have a comprehensive view of their potential risks. To gain this view and help SMEs stay protected financially, business owners can leverage data and predictive analytics to gain a detailed understanding of the previous payment behaviour of their customers, while seeking to anticipate future performance, to mitigate the potential impact of late payments on their cash flow.

“Ultimately, for SMEs to get on the front foot, they’ll need a full view of all existing customer and supplier relationships to assess the potential impact and identify new opportunities; ensuring continuity as the UK economy continues its road to recovery.”

Tim Vine, Head of International Finance & Risk Solutions, Dun & Bradstreet