1. Late payments
£4.4 billion. That is the amount UK SMEs spend chasing late payments every single year.
Late payments are one of the top causes of cash flow problems for businesses.
Continuously checking payments, putting the time aside to chase clients, and updating records is timely costly. To relieve yourself of this manual task, it is worth thinking about ways of making payment easier for customers, by offering mobile and digital payments, or options like cash on delivery.
For businesses that require face to face payments, services like Square allow you to take card payments anywhere, via a portable, battery-powered card reader. Online, the world is your oyster. Worldpay processes over 40% of all card transactions in the UK, but options like Paypal, Shopify, Stripe, and Klarna are all great too.
If none of the above options are suitable and you still find yourself continuously chasing, it might be best to put in place some automated reminders for clients instead. Finance automation systems might seem costly but in the long term save you time, money and stress.
If you’re really struggling to get a client to pay up, there are also debt collection agencies. This isn’t as scary as it sounds, and many simply send letters and make calls on your behalf. The downside is that it is expensive and in regaining your cash, you could be saying goodbye to future business.