The Domino effect of late payments
8 September 2021 - James Salmon, Operations Director.
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New research from GoCardless, shows that a single late payment doesn't just affect the supplier immediately involved, but triggers a domino effect that tumbles with a domino effect through the supply chain.A survey of 500 UK business decision makers (DMs) from GoCardless, found that 86% of DMs agree that one late payment affects everyone in the supply chain.Indeed, out of the 31% of businesses that have paid a supplier late, 47% said that it was in turn, due to late or failed payments from their own customers.38% reported that because they were paid late, they were forced to consider delaying payments to their own suppliers, pushing the domino effect further down the chain.The ripples of this domino effect went further. 35% of the DMs indicatde that late payments would make them think about raising the price of their products or services for customers. While 26% say they would consider postponing their hiring plans, potentially impacting the availability of much-needed jobs.The findings of this research indicate, however, that businesses would like to turn this vicious cycle into a virtuous one, with 97% of respondents agreeing that every business should be paid on time. And, the first thing one in five businesses (20%) would do if they collected all of their receivables on time is to pay their own suppliers sooner.Given the domino effect of a single late payment, the research highlights the impact that one company’s payment strategy could have on a wider economy.Pranav Sood, VP Small Business at GoCardless says: “Slow and late payments present a challenge to businesses of all sizes, but what is often ignored is the trickle-down effect this has on both suppliers and customers. Prompt payments power change that can boost the entire economy. This is why GoCardless is pushing for improvement, not only for the businesses we support but also for the suppliers and customers implicated in the wider chain.”Responding to the research, Dr Roger Barker, Director of Policy at the Institute of Directors says: “These findings indicate that paying on time is not something that benefits a single organisation. It has a positive impact up and down the supply chain, and beyond. All businesses must play their part to better this issue for the good of the broader economy, especially as we rebuild in this post-Covid world.”The Credit Protection Association has been championing prompt payment for decades. Using its unique late payment compensation service, we have been trying to stop this domino effect and end the late payment culture that hurts the UK economy and kills tens of thousands of otherwise good small businesses every year.Using late payment legislation that has been on the statutes for decades but barely used, CPA uses specialist software to study the historic sales ledger data of clients and identify historic late payments from former customers. The clients then decide which former customers they want pursued and CPA then uses our collection expertise and unrivaled knowledge of the legislation to collect that compensation from those late payers.This has two benefits. The client had suffered the PAIN of late payment, now they get the GAIN. The late payers in turn are taught that late payments are not the free source of cash flow they thought and hopefully are encouraged to change their payment habits and pay their current suppliers on time to avoid the potential for future claims for more compensation.Want to become part of the fight against late payment and get compensated for ?No face-to-face meeting required - just call Peter Uwins, CPA’s National Sales Manager, on
020 8846 0000 (business hours) or email
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Why should you become a CPA member!The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid since
1914. We have seen many financial crises, this one will be particularly deadly for suppliers for some time to come.CPA eases cash from tardy debtors - Efficiently, Effectively, Economically and Ethically. And we provide credit information so you can monitor and assess your key customers.Unlike other credit management companies, we charge our members a fixed annual subscription irrespective of how high the debt value is!It takes less than 17 minutes to see how you would benefit, do you have the time now?No face-to-face meeting required - just call Peter Uwins, CPA’s National Sales Manager, on
020 8846 0000 (business hours) or email
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When you see your money come in, you will be so glad you used CPA.The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collectionsGet compensated for previous late paymentsHave you been paid late by business customers in the last six years?Maybe you no longer work with them. Under legislation, you are entitled to compensation you for those late payments you have suffered.You put up with the PAIN – now claim the GAIN!Claim late payment compensation (LPC) from former business customers who paid you late in the last six years!CPA (LPC) Recoveries is using our bespoke software and decades of experience to do just that for our clients
Check our compensation calculator to see how much your business could be owed!
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Discover NOW the potential value of late payment compensation hidden in your sales ledger!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
