BEATING THE BUSINESS GOLIATHS

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Business bullying between SMEs and larger businesses is becoming increasingly common place in the payment battleground.

New research revealed by BACS highlights the problem facing small businesses who are being forced to wait, on average, eight weeks after bills are due to be paid. This research also found that the national late payment debt currently stands at a staggering £30.2 billion.

Platform Black’s own research carried out in February supports these industry findings with 65% of SMEs confirming that their clients have taken longer to pay invoices in the last 12 months than in previous years.  Furthermore 33% confirmed that payments are regularly received late, with nearly a third of those payments received in excess of a month overdue.

The facts are that small businesses are being dictated to by larger companies that set ‘take it or leave it’ payment terms or hide behind labyrinth accounting procedures to delay payment and further their own interests.  More than half (58 per cent) of small business owners state there was little negotiation over payment terms with larger customers.  In these tough times, SMEs have to fight even harder than they should need to, to survive, preferring to push themselves to the brink of insolvency and upset longstanding suppliers than risk losing a valuable client.

This simply isn’t fair and something has to be done.

A glimmer on the horizon for cash-starved SMEs may be Minister of State for Business and Enterprise, Michael Fallon’s, promise to name and shame FTSE 350 companies that fail to sign up to the Prompt Payment Code (PCC) .  Debenhams, easyJet, and JD Wetherspoon were among the large companies named as not having signed up to the code by March.

Progress is steady, but slow.  Since Fallon wrote to big businesses in November 2012, 126 have signed up, but more than 200 have still not backed the initiative.

With average businesses waiting for £31,000 of overdue payments, and one in ten being owned £50,000 or more, Platform Black is adding its voice to the debate by applauding and highlighting the 1,381 businesses that have signed up to the code to date.  You will find them listed here.

In the face of intransigence from big businesses and a banking sector that has limited appetite and ability to lend, Alternative Finance is proving an increasingly popular option for SMEs.   This is demonstrated by Platform Black and other major players reporting record levels of interest and activity.

In true David and Goliath style, let the battle commence!

Kelly Wilson is a professional writer who has years of experience writing about Finance Invoice, Finance Invoice of SME and many other topics.

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