1,000 CEOS, founders, directors and senior management staff at SMEs have been surveyed by the financial services company, Tide, which highlighted that small and medium size British businesses are chasing payments that total over £50 billion. Along with the cost of the actual outstanding payments, companies need to consider how much time is dedicated to chasing outstanding invoices, as this will also cost them money as they need to factor in paying their employees for their time. The research showed that the average SME has five outstanding invoices at any given point, which employees are spending 1.5 hours per day chasing, and an average figure of £85,000 is the amount owed. Businesses who employ between ten and 50 staff are owed approximately £13,000, spread over an average of 7.5 invoices. The issue also affects those who are self-employed, who ordinarily have an average of four outstanding invoices, which total a figure of roughly £1,000. It is thought that the outstanding amounts average £1,000. The severity of the problem varies considerably based on location, with London claiming they struggle the most in relation to late payments, and have an average of seven invoices outstanding, which takes two hours a day to follow up. This was closely followed by Scotland, who reported six unpaid invoices, taking an hour and a quarter to track down each day. Those in the south west suffered least with an average of three unpaid invoices.
The issue is so substantial that 50,000 SMEs were forced to close their business due to the amount of late payments in 2016.
Tide’s CEO, Oliver Prill, commented:
“It has been known for a while now that late payments are crippling SMEs, with the government having tried a number of times to address the issue. It is however shocking to see exactly how much time SMEs, and particularly the self- employed, are wasting by having to chase clients to pay promptly. Cash flow is crucial for SMEs, and just a few late payments can tip them into danger of becoming insolvent. In addition to wasting time chasing payments, decision makers and senior leaders at SMEs are spending 30% of their working day (12 hours per week) on unprofitable admin tasks, based on the average weekly hours worked. This is equal to almost two and a half hours each day (30%) – totalling 12 hours per week spent on tasks such as banking, expense management, book-keeping and accountancy. 83% say they regularly work outside of ‘normal’ office hours, with more than half (55%) working weekends and 2 in 5 working on bank holidays (40%).”
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Number of Greater Manchester businesses to prohibit zero-hours contracts 28 January 2020
Founder supporters of the “Good Employment Charter” in Greater Manchester have agreed to ban zero-hours contracts and will pay higher rates than that of minimum wage to their staff. More than 60 companies have promised to sign the charter, with those still in talks about signing the charter exceeding the 100 mark. The charter is the creation of Labour mayor, Andy Burnham, who asserts that the UK needs to enhance wages and improve the treatment of employees, due to growing concern that there is a widespread practice of businesses offering low-paid jobs, which are leaving people struggling to live comfortably. The Financial Times reported that he said:
“We want to support our world-leading businesses, helping them to grow and invest in our places, while at the same time making sure our residents develop the skills to succeed and find good, secure jobs that pay a real living wage.
This Good Employment Charter is a major step towards making sure that new and existing jobs right across our city region are underpinned by a commitment to equality, fair pay, and giving employees a say in how their workplaces are run.” Companies that sign the charter will be making a commitment to treat staff correctly, to consult with them, along with offering flexible working options as well as clear and tailored training and progression opportunities. Details of some of the first signatories have been provided and they are the family-owned property business, Bruntwood and the company who runs the regional power grid, Electricity North West. Some well-known businesses are also in discussions to join the charter, and familiar names such as Kelloggs, Lloyds Banking Group and Manchester Airports Group fall into this category. The Lloyds ambassador for the north of England, Elyn Corfield, said:
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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