Micro-businesses at risk from slow-paying clients

The research found that 86 per cent of micro-businesses that issue invoices said they had been paid late, while just 14 per cent said they had never been paid late. 

And the poll also suggested that some respondents did not view chasing late-paying clients as a matter of urgency. Almost a third of respondents said they wait for a month or more after their payment deadline has passed before chasing up an unpaid invoice, while only 28 per cent said they would chase an invoice within the first week after it was due.  

Ed Molyneux, CEO and co-founder of FreeAgent, said: “When you’re running a business it’s really important to get paid quickly – late-paying clients can create major cash flow problems which in extreme cases can lead to the failure of your business. 

“But our research shows that many UK micro-business owners face real problems when it comes to getting paid on time. We also found that many micro-business owners are waiting for months before they chase an unpaid invoice, and that’s really too long.   

“We know that it can be awkward to chase clients and ask them for money, but if you don’t follow up with late payers from the moment that their invoice is overdue, they may not see the urgency in paying you. And that means you may be stuck waiting for months – or in extreme cases even years – to get paid what you’re owed. 

“So instead of worrying about having that awkward conversation with a client, make sure you chase your overdue invoices quickly. Either make chasing invoices a strategic part of your weekly accounting or invest in the right tools or software that will do it automatically for you. Otherwise you run the risk of missing out on what you’re owed and your business may suffer.”

FreeAgent believes that the results demonstrate the need for its multi award-winning cloud accounting system among the UK micro-business sector – as the software includes the ability to set up automatic reminder emails that are sent to clients when invoices are overdue – and the value of the business to investors interested in its crowdfunding drive. 

More information about FreeAgent’s crowdfunding campaign can be found here: https://www.seedrs.com/startups/freeagent