This week Sheffield Chamber of Commerce hosted a live webinar and we were honoured to be asked to participate. Our CEO and co-founder Glen Morgan spoke with the Small Business Commissioner Philip King about late payments, how to ask for overdue invoices, and what the future holds for small businesses.
The UK Small Business Commissioner Office was set up in 2017, following the announcement of the 2016 Enterprise Act. It’s an independent public body whose aim is to tackle late payment and unfavourable payment practices within the private sector. Philip told listeners of conversations he’d had with clients of the Small Business Commision, whose worries about late payment had overridden everything and affected their personal lives - to the extent that some were worrying about being able to feed their families due to lack of payments.
This really brought home to us at itsettled how devastating late payments can be for small and medium business owners, and reminded us why we do the work that we do here at itsettled.
Our purpose at itsettled is to provide credit control services to businesses at a fraction of the cost of a credit manager, and our aim is to help as many businesses as possible over the next five years. We hope to eradicate the need for businesses to approach the Small Business Commission in the first place by providing a preventative process with the itsettled app.
So, what support is currently available to small businesses from the government?
Philip says that along with government run business growth hubs and the business support helpline, his office can give free advice to businesses and advise on contract set-ups and invoices. If they can’t give advice, they will signpost to the relevant organisations that can, and they can also collect owed money on behalf of small businesses. The Small Business Commission also identifies poor practice and publishes public reports, as well as focusing on education for both small and large businesses on payment culture.
When asked for practical tips for the businesses on the call, both Philip and Glen spoke of the importance of having good systems in place to ensure a healthy cashflow, as well as honest and transparent communication at all times.
Glen spoke of having a standard process, and using it for all your invoices consistently. Here’s how the process works:
- Make sure your invoice has arrived with your customer or client.
- Before it’s even due, send a gentle reminder of the invoices due date. If there are any issues, sort these out before the due date.
- If they haven’t paid by the due date, make sure you know what you can legally say. Having an automated app like itsettled can help with this.
Glen also spoke of the importance of spending a few minutes each day on credit control. This way, it can become more manageable and easier. If it’s something you struggle with, getting it out of the way first thing will ease your mind and give you a higher chance of getting your owed money on time.
Philip spoke about carefully managing your business’ cashflow, and how important it is to find a solution such as itsettled which works for you, and use it. Philip also highlighted the four most important questions to ask, which are;
- Who is buying from me?
Beforehand, try and establish whether the customer is likely to pay you - are they signed up to the Proper Payment Code, or can you look at their Payment Practice form? (Linked here.) Make sure you invoice the right company too!
- When are you going to be paid by them?
If you can’t get a contract, exchange emails so you can get something in writing. If you’re able to, ask for a deposit or advance payment.
- How are you going to be paid?
What system will your customer use to pay you? Does your customer have a particular system they use to clear their invoices? Find this out beforehand and get on to their system as early as possible.
And most importantly of all…
- Ask for what’s yours.
Don’t be afraid to ask for help, and be proactive in asking for payment. Don’t leave it until after the payment is due - you can call beforehand as a customer service call to ensure everything is going well.
To round up the webinar, Philip and Glen discussed what the future holds for businesses in 2021. Although Philip acknowledged that 2021 is going to be tough, he stated that it’s vital for businesses to think about their credit control process, and to be consistent with communicating with suppliers and customers alike. He went on to say that businesses need to be agile, innovative, and flexible. Glen also spoke positively of the future, and how he believes that with good procedures in place, businesses can be hopeful.
The Small Business Commission is working with the government to improve business practice, and along with our app, we truly believe this can make a huge and very necessary change to the lives of SME’s. If you have any questions for us at itsettled, please don’t hesitate to email us at email@example.com.
You can find out more about the help that the UK Small Business Commission provides here.
The webinar is available in full from Sheffield’s Chamber of Commerce Youtube Channel, and you can watch it here.