As The Journal’s Pay Fair campaign has sought to highlight, late payments can cause major problems for businesses, even forcing some to close.
The ongoing issue, however, has brought increasing innovation to the world of online accounting, with a number of start-ups working to tackle late payments seamlessly through digital technology.
One example is Satago, a cloud-based software solution that integrates with users’ accounting systems, launching a highly adaptable automated process for chasing payments.
This begins with email reminders as payments are due, followed up by hard copy letters sent out by Satago.
Ultimately, even claims for compensation or phone calls with qualified individuals can be processed automatically, leaving SMEs free to concentrate on their core business.
Meanwhile, the software is collecting analytics, providing feedback in the longer term on who, for example, are the best or worst paying customers the business deals with.
“There are quite a lot of systems to help you get sales but not so many to help you get the money that is owed to you,” said Satago founder and chief executive Steven Renwick.
“Small businesses are often good at getting the sales in - because people love their businesses - but nobody likes chasing customers for payment.
“It’s uncomfortable, but we can take on the problem while still leaving it in the company’s control; they can tailor the messages, for example, or shut it off for certain customers.”
The scope of the product, which Mr Renwick has discussed during meetings at 10 Downing St and with the Department for Business, Innovation and Skills, is enhanced through partnerships with accountants, including Paul Colman, of the Newcastle-based online accounting firm CloudBook.
“Online accounting software add-ons such as Satago really save a business a lot of time and hassle,” Mr Colman said.
“Our clients love how much time they save using online accounting rather than manually entering onto desktop software, spreadsheets or even paper cashbooks.”
Ormsby Street, a Software-as-a-Service business providing financial data services for SMEs, has also seen the potential in tackling late payments, its new product, CreditHQ enabling small businesses to check their customers’ and suppliers’ financial stability, and monitor their credit and payment performance.
Customers gain free access to over 7m company records, all explained in an easily understandable manner through software that can be accessed from anywhere.
Managing director of Ormsby Street, Martin Campbell, said: “One of the major problems small business owners cite when questioned about running their own business is cash-flow and knowing who they should be doing business with.
“In the UK, a huge number of SMEs are plagued by bad debt when partners fail to pay invoices within the agreed period, with 38% of small businesses having experienced cash-flow problems often threatening to put them out of business.
“This lack of funds in a business can be responsible for stunted growth and slow company development.
“CreditHQ aims to make this a thing of the past, offering free, easy advice, allowing companies the ability to understand the financial patterns of trading partners, ensuring adequate funds are always available.”
Through the Pay Fair campaign, The Journal is encouraging North East companies of all sizes to take a responsible and ethical approach to paying firms within their supply chain.
We are asking firms to sign the Business Ethics Pledge created by the North East Institute of Business Ethics, thereby agreeing to join with others to discuss the value of business ethics and to work with each other to transform their working environments for the better.
For more information, see http://www.nibe.org.uk/