Most small and medium-sized enterprises (SMEs) in the UK suffer from delays in being paid.
Research by Pay.UK - the country’s independent payments operator - late last year found that late payments owing to SMEs amounted to GBP23.4 billion. The scale of the problem becomes apparent when you consider that, a year before, there had only been GBP13.4 billion in late payments.
There were plenty of other worrying findings. For instance:
• SMEs in the UK spend GBP4.4 billion annually just to collect the money that is owed to them. Just over one fifth of SMEs spend at least GBP500 a month pursuing creditors.
• Some 54% of SMEs suffer from late payments: that’s the highest number since 2015 (when the figure was 55%).
• The average burden of late debt rose from just over GBP17,000 in 2018 to GBP25,000 per company. For the average SME, a burden of GBP35,000 could ruin their business.
• SMEs dealt with late payments from customers by using bank overdrafts (35%), holding off on paying their own suppliers (24%) and/or taking a cut in the salaries that they are paying themselves (24%).
• The delay in being paid was two months or more for 45% of SMEs.
In other words, even before anyone had heard of Covid-19, or imagined the chaos that it could cause, SMEs in the UK had a need for faster payments. Unsurprisingly, Pay.UK processed 2.4 trillion FasterPayments (involving online banking payments and Standing Orders) last year, or 19% more than in 2018. The value of these payments also rose, to a record GBP1.9 trillion. In addition, the number of Direct Debits handled by the Bacs Payments System (another part of Pay.UK) increased to 4.5 billion, which was also a record.
Safenetpay is in the business of cheaper and faster payments for SMEs. As a client of ours, you get a UK account number, sort code, and EU IBAN in your own name. That means that, if you’re operating in the UK or another European country that is a part of the Single European Payments Area (SEPA), money should reach your account no later than the next business day. We enable you to accept payments the way that you want - including credit cards, debit cards and over 150 alternative payment methods.
Equally, we enable you to make payments faster as well. The less time that money is tied up in the payments system, the better it is for all SMEs. We’re here to help.