By Peter Whent, CEO and founder, Clear Invoices
In the uncertain UK economic climate, British small and medium sized businesses (SMBs) need more than ever to find business tools and technologies to help them work smarter and crucially, spend more time on developing innovative ideas or driving growth. For entrepreneurs, owner-managers and directors alike, keeping cash in the business and securing profitability have been the watchword over the past two years.
However, one problem which has made the situation worse is a perennial one. Late payers are still a major concern for British SMBs and the area most likely to bring down a new or established small business, especially in uncertain trading conditions. SMBs are at risk of failure as customers and vendors (themselves often stretched) continue to take excessive time to settle their bills. What is to be done?
However, help in managing this challenge is at hand. New business technologies such as Clear’s Invoicing network can help ease the administrative and payment challenges that threaten so many entrepreneurs’ honest endeavours. Research by Bacs Payment Schemes Limited (Bacs) indicates that SMBs are having to wait an average of 41 days longer than their original payment terms, before invoices are paid. Further research by the Small Business Administration claims that 95% of SMBs fail within their first five years, which in the end affects the entire stability of the UK economy.
In the emerging age of the smart phone and massive competition for services inspired by the Internet, — entrepreneurs and SMBs have to be on the go to remain competitive, using their smartphone as their ‘office’ to receive emails, be in contact with clients and essentially, send invoices. This new breed of efficient, agile, net-savvy business owner knows that efficient use of technology is critical to satisfying customers while making optimum use of their working hours to deliver administrative efficiency. In these conditions, it can be difficult for small firms’ teams to closely track their time spent with a myriad of clients and suppliers. In addition, raising invoices ‘on the go’ and ensuring they are chased and settled are complex tasks and can often disappear into a black hole. If they remain unpaid and unacknowledged, the SMB owner’s cashflow is affected. Moreover, late payment is frequently cited as the number one problem faced by SMB owners, which usually results in taxation discrepancies.
New user-friendly tools will provide the solution to many of these problems but especially the biggest one of all - getting paid late. The Clear network is a cloud based invoicing and time tracking network that allows small business, sole traders, freelancers and entrepreneurs to quickly raise invoices. Creating and sending a simple invoice can take less than ten seconds. The software will automatically follow and track every invoice sent. The system frees small firms to focus on their business because it greatly reduces the time needed to manage the entire money collection process, from raising invoices, to sending, tracking and receiving payment. This type of platform will enable SMBs to secure cashflow as well as streamline their operations and, in time, understand how much energy they are spending on individual customers and then charging more effectively for it.
This removal of ‘red tape time’ could make all the difference for entrepreneurs in today’s trading climate since the average amount owed to a small business at any one time is £25,000. While this trend of late payments is not expected to change anytime soon, and the latest Budget provided little practical help on this issue — SMBs need to look for cost effective and simple business tools to help small companies work smarter. Clear can help a business get paid 14 days faster, a huge improvement from the current 41 day wait. This sort of online tool is also cloud-based, which avoids the need for companies to purchase any new invoicing software and train themselves or their staff on running it on their existing office computers. Clear is focused at making lives easier for the SMB market and are working towards creating a complete ecosystem that delivers business tools to small firms accessible for virtually anywhere.
SMBs are the future of the UK economy and will help drive the UK out of the recession to become a profitable booming nation. Despite initiatives such as the government’s Start Up Britain campaign, the greatest help for business will most likely come from practical measures to help SMBs overcome key problems such as late payment. Tools such as Clear invoicing network will help SMBs secure cashflow, spend less time on administrative tasks and focus on what they do best — grow and manage their business.