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Keywords: einvoicing, electronic invoicing, discounting platform, supply chain, accounts payable, dynamic discount, British Chamber of Commerce
Anna Bowsher | News | 2 October 2012
The British Chamber of Commerce (BCC) last week revealed the results of a survey of 5,343 businesses that revealed, amongst other findings, 94% respondents have been paid late in the past, and a quarter of those respondents experienced delays in over 40% of their payments received.
For the past few years, many businesses have experienced cash flow problems through the supply chain. The report, entitled ‘The Prompt Payment Report’, was commissioned to asses why and to what extent late payments were affecting business growth in the UK.
The results provide a new level of cross-sector visibility as to the causes of supply chain stagnation. 62% of respondents said that private sector businesses are more likely to make late payments than SMEs or the public sector, though the public sector is harder to engage with when they do.
Another significant result from the survey demonstrates that BAS (Banker’s Automated Clearance Services) and cheque are the most common form of payment, with 85% and 69% of respondents respectively saying they use it. However, only 20% of those who said they have been paid by cheque say this is their preferred method.
One key recommendation from the BCC following the survey is that businesses should make better use of e-invoicing, not only to maximise on the cost and efficiency savings, but also to benefit from discounting platforms.
Other BCC’s recommendations include:
While there are things the government can do to help alleviate the cash-flow difficulties therefore, the major effort needs to come from businesses themselves. John Longworth, Director General of the BCC, commented, “Businesses must also work together with the government to ensure late payments become less endemic across the supply chain. Measures such as a kitemark for prompt payers, alongside moves to encourage local government to use e-invoicing, could mean fewer businesses struggling with cashflow problems”.
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