A new debt management tool from the FSB Federation of Small Businesses) could help SMEs tackle the damaging effects of late payments.
The Persistent Problem of Late Payments
It’s estimated that around a third of payments to UK small businesses are late, significantly affecting their cash flow. The FSB believe that eliminating the problem could prevent the collapse of around 50,000 businesses a year and boost the economy by £2.5 billion.
The average value of a late payment owed to small businesses is £6,142. An FSB report showed that 37% of small businesses have had cash flow difficulties, 30% have been forced to use an overdraft and 20% have experienced reduced profits due to late payment.
Dave Stallon, Commercial Director at FSB, says: “Late payment has been a huge and debilitating problem for smaller businesses for too long. Whilst we persist in asking the Government to tackle the worst payment practices, we’ve now introduced this new product to empower small businesses to recover their debts in the most simple and effective way possible so they can focus on running their businesses.”
Fee-Free Debt Recovery
The FSB’s new debt management product, called FSB Debt Recovery, covers any size of commercial or consumer debt, regardless of whether the debtor is based in the UK or overseas. It’s simple for small businesses and the self-employed to use. Users simply need to register online, then load the debtor information and amount owed. The FSB’s Debt Recovery platform is accessible 24 hours a day, every day of the year.
Before any legal action is taken with the debtor, a letter is produced by FSB Debt Recovery’s partner Debt Guard. The FSB says that usually, this is all it takes to make a debtor pay promptly, giving a seven-day deadline for receipt of payment.
Often, a solicitor’s letter can be costly. However, users of the FSB tool can expect to recover 100% of the money they’re owed without having to pay any fees or commission. FSB members with the Business Essentials package can have up to 20 legal letters per year issued at no extra cost.
The FSB’s launch statement said their Debt Recovery tool “will make a progressive change to the UK’s 5.5 million-strong small business and self-employed sector.”
If you have an ongoing issue with a late payer, don’t just let it lie. Take Action!
To find out more about the additional features and services available from FSB Debt Recovery, visit their webpage.