While the world’s attention is focused on the conflict between Russia and Ukraine, about 440,000 or 8% of the small businesses in the United Kingdom face insolvency from cash flow problems arising from higher operating costs and difficulties in getting invoices paid on time.
In this podcast, Liz Barclay, UK Small Business Commissioner, and RIABU’s Mark Laudi, discuss the importance of the prompt payment code introduced by the UK government in 2008 to encourage large companies to commit to good payment practices, and how, barring a few outliers, the industry average of payment days has been improving. But Liz believes that more needs to be done. She emphasizes that a company’s board of directors have an ethical responsibility to pay invoices on time. To safeguard the sustainability of their suppliers, it must be a strategic decision rather than an operational one. This, in turn, helps all stakeholders because it enhances the supplier's bottom line, which attracts more investors and qualified workers.
On the other hand, small businesses or suppliers lack negotiation skills and make a variety of invoicing errors. Liz points out that while digital technology has helped many small businesses save time and minimise the number of invoicing errors, it isn't the ultimate solution for getting paid on time. They must be bold and confident enough to propel their business forward by negotiating better payment terms with their customers.
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Get paid or go under: Lessons from a successful specialty chemicals firm
How large companies get their invoices paid: Insights from the CEO
Could Fringe Benefits Tax cut boost SMEs' post-Corona business?
Why are Australian SMEs reluctant to take up Covid SME Guarantee Scheme?
How to put your business in hibernation mode, ready for a post-Covid restart
What can SMEs learn from China's debt shake-out
Is your SME a zombie company that is just surviving on payouts?
What will happen to your SME if there is a second wave?
To those people who think SMEs deserve to be paid late
Second Covid wave: How can SMEs prepare?
How to finance your exports post-Covid
What will happen to SMEs when the Covid financial relief ends?
How freelancers can get paid on time
What to do if a customer is going broke
How can you stave off bankruptcy post Covid-19?
What happens when Covid support ends and deferred costs bite?
It's not funny: Ad agencies decry clients who pay their invoices late
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