Being Paid on Time. Ashley Commercial Finance's Guide
Late payment of invoices is a big problem for many businesses with the DTI estimating that at least 10,000 businesses fail each year as a result.
“At any one time, £20 billion is owed to UK businesses,” says Richard Wilson, head of business policy at the Institute of Directors and chairman of the Better Payment Practice Group (BPPG). On average, invoices are paid 19 days late. The legal position is unequivocal. If you have agreed clear payment terms with a customer who fails to pay on time, it is a breach of contract. However many firms don’t tackle the issue up front and many don’t have ‘cast iron’ contracts.
Since 1998, firms have been able to charge late-paying customers interest at 8pc above the Bank of England’s base rate. However, in a BPPG online poll of 727 businesses, only a third had ever tried to charge interest and of those businesses charging, only 28% were successful. This was up from 20% last year.
A growing number of businesses are turning to invoice finance to avoid the hassles of late payment. Russell Lee at Exhibition Graphics; “We are so busy we have no time to collect our debts. Anything that makes us look more professional has to be worth it. Cash is king. We are managing our finances better.” Pat Hargreaves at Refrigeration Concepts Ltd. added; “Using an invoice finance specialist saves days of work chasing for money. It is easier for them to recover the money and is so much easier to control.”
Jayne Merriman, Operations Director at Ashley Commercial Finance agrees; “Invoice finance is fast becoming the smart way to finance a business and is often a much better option than an overdraft. We have many clients who use our services purely because they don’t want the hassle and don’t have the time to chase overdue debts. It is interesting to note that we are seeing more and more inquiries from this type of company. The important factor that companies looking for this service must consider when selecting their invoice finance provider is that every invoice needs chasing, not just the top 10 each month. Ashley chases EVERY invoice it deals with for a customer.
Conscious of the need for companies to be paid on time, small business invoice finance specialists Ashley Commercial Finance has produced a guide to help speed payments for small business. A few ‘gems’ are given below:
- Credit check all new customers as a matter of routine. - Tackle payment issues up front with a ‘cast iron’ contract. - Add in to all your contracts your rights under The Late Payment of Commercial Debts (Interest) Act 1998. - Separate the ‘can’t pay’ from the ‘won’t pay’ customer. - Keep the lines of communication open. - Charging interest on overdue payments as a last resort.
The 6 page guide is available by contacting Ashley through www.ashleyfinance.co.uk There is also a great ‘step by step guide’ to invoice finance there, the 10 questions to ask when considering invoice finance and more information about the company, which this year celebrates 10 years in business.
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Ashley Commercial Finance is a truly independent invoice factoring company, with no ties to banks or other financial institutions. Ashley provides invoice finance for the smaller business (including start ups and turnarounds) across England and Wales. Ashley has offices in Manchester, London, Leeds and Bristol. The company has almost 200 clients with turnovers between £50,000 and £1.5 million. They range from printers to road haulage companies, recruitment agencies to taxi firms, recycling companies to IT organisations.
Ashley provides ongoing finance for a business at up to 90% of the value of a client’s sales ledger, which, coupled with professional credit control makes invoice finance an attractive option for a growing business and a smarter alternative to an overdraft. As the facility is based on a percentage of turnover, the funding available grows with the business. Ashley’s independence and lack of bureaucracy means that funding can be in place for new clients to draw down within 24 hours of receiving sales invoices and at the lowest minimum fee. Full Online Account Access enables clients to obtain account information 24 hours a day.
Unlike many other invoice finance companies, Ashley allows clients to choose which accounts they factor, thus avoiding paying unnecessary factoring fees.
In response to client demand, Ashley launched an asset finance facility in June 2005. This is available for anything from computers, telephone systems and office equipment, through to company vehicles, plant and machinery.
There is a great ‘step by step guide’ to invoice finance and more information about the company, which this year celebrates 10 years in business, at www.ashleyfinance.co.uk
Ashley Commercial Finance is a patron of the National Association of Commercial Finance Brokers (NACFB).
Press Contact: Jane Harrad-Roberts Consultant Director, Marketing Projects Email: jane@marketingprojects.co.uk Mobile: +44 7785 395705 Tel: +44 1244 330000 Press hotline: +44 1244 330101
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