Home > Uncategorized > Late payments cost “3.4m jobs”

Late payments cost “3.4m jobs”

According to this article.

My usual approach is to ignore pieces where the headline figures leave you indredulous but some points within the piece are probably worth considering. This paragraph did leave me sceptical

Two-thirds of small business owners would hire up to five new members of staff if big business clients paid up – bringing a potential 3.4m jobs to the economy.

Further responses found over a fifth of business leaders would increase their marketing and sales budgets, while 17 per cent would increase the wages of their workforce.

Hmmm but this makes more sense

Further research has revealed low enthusiasm for the government’s incoming late payment tsar, tasked with supporting small suppliers in supply chain relationships. Just two per cent of micro business owners and freelancers believed the small business commissioner could fix the late payment culture.

Despite the extent of working capital held up in late payments, Business Advice previously revealed that unfair payment terms could be the real scandal. One small supplier told us that small business owners are often “bullied” into long payment terms and handed invoice times of up to 90 days.

All believable but it does beg the question that I am bound to ask

If a boost to cashflow is so fundamentally important to the business and is guranteed to bring about strong growth then why on earth are these businesses not financing their debtors? The costs are pretty low and surely if their comments had validity these would quickly be outweighed by the benefits

 

 

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