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It's Official! Late Payments Cause Damage

Many other factors are worrying too ...

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According to recent BCM research, late payments from customers are now a more significant challenge than a year ago ...

Late payment are causign damage, but other things are knocking the confidence of businesses too!

Late payment are causign damage, but other things are knocking the confidence of businesses too!

copyright: alphaspirit / 123rf

Business sectors, including property, services, manufacturing and retail are experiencing this as a growing issue. Other challenges include regulatory compliance and customer demand.

The Chief Executive of ICAEW, Michael Izza said, "The Prime Minister has promised Brexit by 31 October and the overriding priority of his government must be to get a good deal. More than anything else that will give businesses the stability they are crying out for.

However, our members remind us that they face other challenges as well, many of which have little to do with Brexit - such as late payments and the regulatory burden. Robust Government action on these issues could make a real difference to the business environment, especially for SMEs, and would help to restore confidence and momentum."

The researched offered the following key findings:

  • The trend in confidence within the quarter is firmly downwards. Political uncertainty is certainly a reason, but not the only one.

  • Export sales growth weakens reflecting the continuing slowdown in the global economy.

  • Challenges due to late payments and spare capacity are both up, putting pressure on profits.

  • As costs continue to outpace selling prices companies are maintaining control over their employment growth, which remains below sales volumes rises.

  • Profits are increasing slowly with investment growth suffering.

  • Capital investment is growing more slowly. Spare capacity may explain some of this, and weak business confidence is doubtless a factor here.

The BCM's Confidence index suggested that the UK may see a growth of just 0.1% in Q2 and 0.2% in Q3. There was definitely a boost in Q1, as businesses increased their stocks in preparation for a 'No Deal' Brexit on 31 March, but growth in the rest of 2019 looks to be rather subdued.

Combine this with very low (or even negative) confidence and this points to weak growth in Q2 and Q3. Additional Government spending post-Brexit, along with possible tax cuts may improve both consumer and business confidence.

"Would you like to know more?"

If you're worried about late payments or would like to talk to me about any other business issues that may be damaging your confidence then do give me a call on 01908 774320 or click here to ping me an email and let's see how I can help you.

Until next time ...

Business Godparent

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More about Roger Eddowes ...

Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.

Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.