Is your business still waiting for payment? Well you’re not alone. A new poll by Simply Business has found that the vast majority of businesses are owed money.
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Is business culture to blame?
Whether you work with other businesses, trade directly with customers or supply large corporations, if your business isn’t owed money then you’re one of a lucky few.
And the news doesn’t get better. A survey conducted by Company Check last year found that 68 per cent of small businesses have had to write off bad debt.
Natalie Gasson, the Development Manager for the Federation of Small Businesses, worries that the culture of UK business may be to blame for the state of things.
She said: “The fear among the smallest companies, particularly when dealing with larger firms, is that complaining about a late payment could result in lost future work which will harm cash-flow for their business.”
Government to help tackle late payments
Earlier this week the Government announced they would be hiring a new small business commissioner whose role would involve resolving payment disputes between small businesses and larger companies.
Large companies make up nearly half of all debt to small businesses, according to payment processor Bacs. In total, these bigger organisations owe SMEs over £26 billion.
To help challenge the way of working that had lead to this level of debt, the new commissioner will be a champion of ‘culture change’, the Government said when announcing the role.
On top of this, new regulations which come into force in April will require big businesses to publicly declare the time it takes for them to pay their suppliers.
Have you had problem with business debt? Let us know in the comments.