GoCardless urges SMEs to break money talk taboo and get paid on time
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Matters have worsened since the pandemic with the result of more losing money or going unpaid altogether suggests the report. Almost 38 percent of SME decision makers say they feel awkward chasing customers for late payments and 10 percent believe it’s more difficult to talk about ‘the M word’ with their clients now than before the pandemic.
One in six smaller firms admit they follow up with less than a quarter of late customer payments and a majority reveal they would be willing to waive some 10 percent of their annual revenue in order to dodge the discussion.
The situation leads to anxiety over how bills can be settled, plenty of sleepless nights, inhibits progress and even a company reaching its full potential.
Women are the most affected with almost half saying cash talk leaves them feeling flustered and overwhelmed by the awkwardness of it all. Reasons cited included not wanting to appear rude, a misgiving that seems to affect fewer men – no surprise there perhaps.
GoCardless’s research also revealed regional disparities across Britain, with Welsh business leaders feeling the stigma most.
Almost half said they felt uncomfortable discussing money in a business context, compared to 25 percent nationwide.
However, Welsh customers are also the UK’s most apologetic: 32 percent admit to feeling sorry when they find out about outstanding bills.
On the other end of the scale, only 16 percent of small business decision makers in the East Midlands feel uncomfortable talking to customers or suppliers about money.
And payers in London are the least apologetic, with just 24 percent in the capital reporting remorse compared to 28 percent across Britain.
Pranav Sood, GoCardless small business vice president, commented: “Talking about money has long been a taboo in the UK, so it’s no surprise that small business leaders find it uncomfortable to chase their customers for cash.
“However, with 91 percent of people now saying that they would never knowingly pay a business late, there couldn’t be a better time to break the stigma around this topic. If small business leaders can couple frank conversations with changes to their payment processes that allow them to get paid on time every time, they can end the awkward money moments once and for all.”
Go Cardless advises:
1. State your payment terms, including when and how payments should be made, as early as possible in your discussions with customers and suppliers. This helps to ensure everyone is on the same page and there are no surprises.
2. Once you’ve agreed your terms, be confident in holding your customers and suppliers to them. Cashflow is as important to vendors as it is to buyers and you are entitled to ask for what you’re owed.
3. Make it as easy as possible to get paid. Offer a range of payment options to suit the preferences of any customer or accounts payable department.
4. Invest in technology to automatically collect your payments. This will help you avoid awkward conversations in the first place and free up valuable time: you can allocate the hours previously dedicated to chasing payments to growing your business.
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