Small Business Commissioner Warns Late Payments Could Slow Investment From SMEs Into Staff and Equipment Development or Even Lead To Insolvency
In a recent podcast, The Small Business Commissioner, Liz Barclay, issued a warning that without confidence in cash flow, the UK’s small and micro businesses would be restricted from investing in new jobs, equipment and training or risk shutting shop.
During the conversation with Saltare CEO, Anthony Persse, Liz Barclay raised the issue of late payments hindering small and micro businesses, because often they’re forced to stretch funds if invoices are delayed or paid late. This has a knock-on effect in cutting budgets for new staff or research and development.
“If we look economically, small businesses are put at risk and can’t manage their cash flow if they don’t have payment certainty or know when payments will be made. This means they either have to stretch their funds or look elsewhere for funding, and this limits their investments not just in business growth but business-as-usual functions.”
In addition to the strain put on business owners’ books through late payments, Liz also raised the issue of the mental health challenges business owners face through not having sufficient cash.
Particular areas of focus for Liz are freelancers, sole traders and micro businesses. She believes these individuals and owners are most at risk of struggling with mental health challenges and sleepless nights, due to an unpaid invoice putting their livelihood at risk.
These issues also flow through into the local communities, when small and medium-sized businesses are impacted by late payments, something Saltare is committed to resolving through its Early Pay platform.
Anthony Persse, CEO of Saltare said: “Chatting to Liz, really brings home how important it is for business leaders and policymakers in the UK to prioritise paying on time. Early payment and the certainty of payment ease cashflow concerns and improves the likelihood of future success and growth. Conversely, poor cashflow and poor payment practices ultimately leads to business failure and insolvency.”