Business News President’s Focus
Lichfield and Tamworth Chamber president James Blackman has renewed his plea for businesses to pay their invoices on time – or, as he puts it, ‘be ethical, help the economy pay in 30 days!’ James, managing partner, Cocoonfxmedia Ltd, made the 30 days campaign the central plank of his term as president, after facing his own problems in getting paid on time. In this month’s President’s Focus, James tells the latepayers in no uncertain terms why their actions cause so much pain for small businesses.
A
s a small business owner myself, I have struggled from day one to get paid on time. When I first started, it was small
numbers: £10 here, £50 there. These then grew as I grew, and it became £25k, here £17k there. So, I am going to be straight and
upfront in this article and may upset a few people as things need to change. At the moment Lichfield and
Tamworth are experience a big boom in entrepreneurial spirit and yet I have heard some people saying ‘is it worth it?’ Sometimes I can see their point, especially when you do the hard work and you literally have to jump through hoops to get paid. It’s not the small companies
which are making you jump, it’s the larger ones who seem to have a completely inflexible approach to paying invoices.
‘If you are worried about your cashflow, review your own internal processes’
They blame the process and the
volume of invoices they have to deal with, or they tell you how tricky it is to process direct debits or standing orders. If I take my business as an
example, we allow payment the following ways: BACs/direct debit (GoCardless), Stripe (all credit/debit cards/Apple Pay). Our accounts system handles the
reminders automatically, and sends everything via email. We can also track when invoices are viewed. I have been on financial training
courses where the tutor has actively encouraged financial controllers to delay payment to their suppliers, so their balance sheet looks good. But to me, that isn’t an ethical
way to do business. Our policy of ‘Pay in 30 Days’ is
gathering support, slowly but surely - and we need more
businesses to sign up to it. At present, 50 businesses have
signed the pledge, and HSBC, Heathrow Airport, John Lewis have all publicly announced that they will pay their suppliers in 30 days. At present, there is a massive
£26bn owed in the UK in overdue payments. Lloyds Bank did a survey and found that there were four times more small businesses owed money than larger ones. And I will say it again - £26 BILLION is owed. Of that, you’ve got to assume that 20 per cent is valued added tax (VAT), which works out at £5.2bn. In fact, it has been reported that
£2.6bn in VAT is owed by small business, all citing being paid late. Yes, £2.6bn - imagine if that was pumped back into schools and education and the NHS? So, here’s my challenge to all the
businesses and members of the Chamber of Commerce: if you pay later than 30 days, why? Why does it take you so long to pay your suppliers? If your processes are set-up
efficiently, why not modernise them to make them quicker and easier to use? If you are worried about your
cashflow, review your own internal processes, and see where you can improve productivity. You never know, you could be liable for some research and tax credits if you improve a process. So, let’s begin making the
playing field level, remove the barriers, innovate your processes and start to be more ethical. The Lichfield & Tamworth Chamber divisional committee is committed to making sure our main policy is drummed home to all businesses. Just remember that figure of
£26bn… and help raise the awareness of this campaign, using the hashtag #PayIn30days on social media. Finally, it takes just 30 seconds to sign up to the pledge, which can be found at:
www.surveymonkey.co.uk/r/QLP7FST 10 CHAMBERLINK December 2018/January 2019
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