Small Talk: ‘Scrap cheques’ call to help SMEs fight late payments
The BCC is now lobbying for a rethink on cheques – a U-turn on a U-turn if you like – which it says can introduce further delays in a payment process that is already damaging many SMEs. Just a fifth of small businesses want to be paid by cheque, its research shows, yet two-thirds are regularly paid this way.
Who represents the greater good – struggling SMEs or those individuals who feel uncomfortable with alternative payment methods? There’s no easy answer, but SMEs do need more help with late payments – the statistics are getting worse rather than a better. At a time when many businesses are struggling with the wider economic environment and a difficult relationship with banks no longer always prepared to offer overdraft finance to cover pending invoices, that’s a real cause for concern.
The BCC’s research shows that 94 per cent of SMEs now have to put up with some customers paying late. Significantly, one in four small businesses says at least 40 per cent of payments arrive late.
That level of late payment is too endemic for SMEs to manage, and the BCC has several ideas for reducing it. In addition to the argument about cheques, it would like to see a kitemark scheme so that businesses with a good record for paying on time can shout
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