By Claire West
New research from Bacs, the organisation behind Bacs Direct Credit, has revealed that over half of British small and medium enteprises (SMEs) (56%) do not anticipate any assistance from the Government in tackling the late payments issue, and that the number of companies feeling the impact of late payments in June 2010 has fallen by a massive 20% in just six months.
Mike Hutchinson, head of marketing at Bacs, believes this is largely due to the individual companies' efforts and says:
"It's extremely heartening to see that there are now many companies making great strides to help themselves beat the late payments cycle, by sharpening up their billing and credit control procedures."
However, there are still a massive 769,000 companies effected by late payments and Bacs' research shows that the total amount of money owed to these companies is now nearly a third more (28%) than it was six months ago (£25,000 December 2009 compared with £32,000 in June 2010), with a massive £24.6bn in total now owed to businesses across Britain.
Hutchinson continues: "There is valuable help and advice available, through schemes like the Prompt Payment Code, for companies still suffering from late payments and SMEs will be well served to draw on all available resources to find new routes forward."
For example, with many SMEs still highly dependent on cheques, a specific piece of advice from Hutchinson is for companies to consider adopting automated payments methods. Bacs' research shows that 79% of SMEs still use cheques to pay bills and, with cheque clearing facilities due to be phased out by 2018, Hutchinson says: "SMEs should consider replacing the use of cheques with automated payment methods sooner rather than later. Automated payments offer many benefits in streamlining processes and helping cash flow, which companies can take advantage of now to help combat late payments."
For more information about late payments and how to tackle them head on, visit www.paymentdirect.co.uk where Bacs has developed a series of hints and tips for encouraging prompt payment.