Late payments - what you need to do

What you need to do about it

Just wow! £112bn of late payments!!!!

These are figures are in a latest report on UK small business finances (see link at the bottom of ths blog).

Late payments are a scourge and they can cause serious problems for business owners and charities.

👉 No cash to pay your wages or bills

👉 No money for yourself

👉 Sleepless nights.

Late payments – Top Tips

I wonder though how much of this late payments scourge is down to customers who are late payers?

Or maybe your business (or charity) doesn’t operate good payment practices?

You should consider these best practice tips to reduce problems with late payments:

1) Set up a cloud-based bookkeeping system.

2) Ensure you use all the relevant features of a cloud-based system such as:

👉 link your bank account and reconcile it at least weekly so you can stay on top of your cash flow

👉 send out your invoices immediately the work is completed

👉 make sure you’re sending your invoice to the correct person or department (and copy in your main contact)

👉 send out reminders the day an invoice becomes overdue

👉 issue a monthly statement

👉 review your aged debtors list every month and take action on anything over 30 days unless you have agreed longer payment terms

3) Phone your customer 1 week after your reminder or monthly statement to establish when they will pay you

4) Develop clear (written) payment terms with every customer, agreed up front

5) Consider staged payments e.g. 50% / 30% / 20%, because that will generate more regular flows of cash

6) For persistent late payers, consider adding in the statutory interest

7) find customers who will pay you on time and move away from those who don’t

Make sure it’s not your fault. Given that there are two sides to an invoice make sure that you play your part.

Check out these Business Finance Top Tips for 2025 to help you improve your financial management.

If you want some specific advice on this, let me know, your first 30 mins call with me is always free!

Tags: Accountant, bookkeeping, Finance, SME, TopTips