Recent insights from Xero Small Business indicate a troubling trend – late payments have surged, with delays averaging 7.3 days from April to June 2024, an increase of 1.8 days over the previous quarter.
This represents the most significant quarterly rise since the pandemic began, particularly affecting the retail and hospitality sectors.
Such delays intensify the cash flow challenges businesses face amid inflation and economic uncertainties.
Effective strategies to counter late payments
Small businesses can adopt various proactive measures to minimise the impact of late payments.
These include setting clear payment terms in all contracts and invoices, issuing invoices immediately after delivering goods or services, and offering customers incentives if they pay before their due date.
Additionally, other good courses of action include strengthening your customer relationships by constantly communicating with them and evaluating the creditworthiness of new customers before extending credit.
As a final measure, consider the legal avenues available for recovering debts. While potentially costly and time-consuming, legal action may be necessary against chronic late payers.
For additional information or personalised advice on handling late payments, contact our team.
With years of expertise and a deep commitment to client satisfaction, our team is recognised for its professionalism, reliability, and personalised service.