HOW LARGE ORGANISATIONS ABUSE SME's

In today's fast-paced business world, small business owners face plenty of challenges, especially when big companies take too long to pay up. This issue of late payments can really put a strain on small businesses, making it tough to manage cash flow and grow.

We know how hard it can be when your money is tied up because a big company hasn't paid its bills. It's more than just annoying; it can destroy livelihoods and families. The Federation of Small Businesses claim annually in the UK 50,000 small businesses go bust each year in the United Kingdom due to cash flow problems caused by late payments. This issue is the biggest single cause of business failure in the UK.

That's why we're stepping up, using our skills and connections to help you get your money faster.

AHG Management Services Ltd (AHGms) is here to help. We are already one of the UK's leading boutique consultancy's offering personal advice on how to run your business and improve your own personal performance but now have also become experts in helping small businesses get the money they're owed. We are delighted to have as Associates one of the country's leading organisations for obtaining unpaid invoices and costs for SME's

At AHGms, we know that small businesses are crucial to the economy's health they account for over 2/3 of the UK's private sector employment and more than 1/2 of UK PLC's turnover.

Making sure you get paid on time is essential to keeping the economy strong. We're not just about getting back money; we're about making sure small businesses feel supported and have a fair chance to succeed. If you're tired of waiting for payments and want to do something about it, we're with you. Join us in the fight for fair payments and a brighter future for small businesses everywhere.

THE PROBLEM OF UNPAID INVOICES

Cash flow, or the money coming in and going out, is critical for small businesses. It's the oil that keeps everything in the engine running. When a big company doesn't pay on time, it can cause a lot of trouble. Small businesses might not be able to pay their own bills, give their employees their wages on time, or invest in new opportunities. This doesn't just stop with one business; it can affect the whole chain of other businesses connected to it, making things hard for everyone.

Sadly, this problem of not getting paid on time affects a lot of small businesses, making it hard for them to pay their own suppliers. This starts a cycle that damages trust and makes financial stress even worse. What's really troubling is that most of the time, these delays in payment aren't because the big companies can't afford to pay; they just choose not to. This raises larger ethical questions about fairness and how businesses should treat each other.

By talking about this issue of unpaid invoices, the goal here is to make people think differently about how they do business. Small businesses are lifeblood to any countries economy and they deserve to be treated fairly. Making sure they get paid on time is crucial for keeping them strong and healthy.

TIME IS MONEY

In March 2023 The Federation of Small Businesses Issued a report called Time is Money: Late Payments 'Stifle' Small Businesses.

Within this report the findings for 2022 were as follows.

• 52% experienced late payment.
• 25% reported increased late payment.
• The most affected sectors include education, construction, administrative, professional, scientific, transportation, IT, arts and human health and social work.
• Small businesses in south-east and east of England, and Northern Ireland were more likely to experience late payments.

The report highlights the impact of late and delayed payment on small businesses and the public’s expectations around prompt payment:

• 37% of applied for credit to manage their cashflow.
• 62% of the British public say they think businesses were paid within a week. 
• 55% of the British public would support more controls.

Time is Money contains proposals for the Government, including:

• Give audit committees of large firms oversight of payment practices and reporting on progress in their annual report.
• Publicly commit to limit the maximum payment terms to small suppliers in law by 2027 if the situation does not improve.
• Bar late payers from public procurement contracts.
• Impose 30-day payment terms, which should be a maximum throughout supply chains.
• Mandate the Small Business Commissioner to investigate potential instances of poor payment proactively, instead of only when a complaint has been made.
• Make the Prompt Payment Code (PPC) mandatory for all local authorities.
• Create a new local authorities Payment Practice League Table with financial incentives for those at the top and bottom for England.

THE IMPACT OF LATE PAYMENTS

One of the first things to take a hit is the relationship between the small business and its suppliers. If a business can't get paid on time, it can't pay its suppliers on time either. This strain can lead to suppliers demanding stricter payment terms or stopping supplies altogether, which only makes running the business more complicated. This issue doesn't just stop with one business; it can spread down the supply chain, affecting many others and potentially having a wider economic impact.

Everything about running a small business is relationships, the damage to relationships especially suppliers will definitely hurt a small business in the long run. Suppliers will start asking for payments upfront and become less willing to provide favorable terms. This will make it hard for the business to keep inventory in check or jump on new market opportunities quickly. Trust and goodwill, which are everything for doing business, will also suffer, making it tough to work out good deals or team up on projects down the line.

Moreover, when money is stuck in unpaid invoices, it limits a small business's ability to invest in new ideas, enter new markets, or grab new opportunities. This means that instead of growing and innovating, a small business might have to focus just on surviving day-to-day. The big picture here is that late payments don't just affect the immediate cash flow of small businesses; they impact their ability to operate, maintain relationships, and grow. Solving this problem is about more than just getting invoices paid on time; it's about creating a fairer, more sustainable business world where small businesses can thrive.

HOW AHGms CAN HELP

AHG Management Services Ltd (AHGms) through their industry leading Associates stands as a guiding light for small businesses caught in the tough spot of not getting paid on time. We're not just about advice; we roll up our sleeves to tackle the nitty-gritty of getting your money back. Our way of doing things looks at the big picture, blending industry best practice with specific solutions to tackle debt recovery, protect your cash flow, and help your business grow.

We really get into the details of what each business we work with needs. This means we can customise our help to fit you perfectly, making sure we're not just effective but also on the same page with what your business stands for. From advising on how to manage your invoices better to stepping in to collect overdue payments, we've got a range of tools at our disposal.

One thing we're really good at is talking things through. We step in to deal with late payers in a way that aims to keep everyone's relationship intact. It's all about finding that sweet spot where you get your money without burning bridges. But when things get tough, we're not afraid to bring in the big guns, tapping into our network of legal experts and debt recovery pros to make sure your case is handled right, with professionalism and sharp legal strategies.

Beyond just getting your invoices paid, we're big on teaching our clients how to avoid these problems in the first place. Sharing knowledge on how to manage your money and protect against late payments is a big part of what we do. It's about giving you the power to steer clear of trouble down the road.

At AHGms, we're more than a service; we're your partner in making sure your business isn't just surviving, but thriving. With our mix of custom advice, negotiation skills, legal know-how, and educational support, we're here to help you take control of your finances and pave the way for a successful future.

LEARNING FROM EXPERIENCE

Throughout our time at AHG Management Services Ltd (AHGms), helping businesses tackle debt, we've learned some life changing lessons and more importantly than anything how we can help a small business stay afloat financially. One big takeaway is the power of being proactive to stop payment issues before they start.

First up, doing your homework on potential clients is crucial. Before you shake hands on a deal, make sure you check out their track record with money. This step can really cut down on headaches later by avoiding those who are notorious for missing payments.

Next, we can't stress enough the importance of airtight contracts. Your contracts should lay out payment terms, deadlines, and what happens if a payment is late, clear as day. This not only sets the stage right from the get-go but also gives you a sturdy leg to stand on if things go south.

Keeping the lines of communication open with your clients is another key lesson. A lot of times, late payments are just a mix-up or a short-term hiccup in your client's cash flow. By building a relationship based on honesty and trust, you're more likely to solve these issues without a fuss.

Lastly, it pays to know your rights. Get familiar with what legal steps you can take if you end up having to chase down money. Being informed means you can act quickly and confidently when needed.

In a nutshell, our journey has shown us that being prepared, clear, and informed are your best bets for keeping your business safe from the chaos unpaid invoices can bring. These practices don't just help in collecting debts; they're crucial for the overall health and success of your business.

CASE STUDIES

AHG were delighted to refer a client to their Associates, this sole trader Business Consultant was owed more than £80,000 by a Global Multinational, this individual was severely affected by Corporate Politics with the Executive who engaged him falling foul of an internal campaign which led to his dismissal, as a consequence this sole trader was finished with immediate effect with a number of unpaid invoices.

Rather than pay the contractual invoices which included paying for meeting rooms for Executives of the Multi-National and paying overdue invoices for recruitment licenses the multi-national decided to claim they were in dispute with the Sole trader, which they weren't.

The sole trader attempted through 'traditional legal routes' to resolve and engage but quickly it appeared that the costs to fight his case were going to be enormous.

Over a number of months he pondered on his next move as at every turn the Global Multinational 'stonewalled' any approach. Even when he approached the UK Governments 'Small Business Commissioner' the Global Multinational continued the 'dispute path' knowing that with their immensely deep pockets the sole trader had little or any chance of pursuing his claim.

It was only when AHGms introduced him to their Associates did resolution appear. The Associates required no up front payment to pursue the claim but instead take their payment from the final settlement, another great reassurance to the Sole Trader was that when the Associate takes on their case if they are unsuccessful there are no fees, they underwrite all expenses.

Within a matter of weeks not only had the Associate made contact, they had presented a water tight case and engaged in negotiations. The first figure was dismissed but the second was accepted which the Associate added penalty late payment charges to so that the figure paid exceeded £120,000. Taking their fees off the settlement the Sole trader ended up with considerably more than his original invoiced amount.

HOW TO GET HELP?

If you're struggling with the stress of unpaid invoices and the financial uncertainty they cause, remember, you're not in this alone. AHG Management Services Ltd (AHGms) is here to back you up with our expertise and proven success record. We're inviting you to get in touch for a free chat to see how we can help your business. Our team excels at turning tough financial disputes into wins, making sure your business doesn't just get by, but actually flourishes.

Choosing AHGms means you're not just picking a service; you're teaming up with a partner who's all in on ensuring your financial well-being and helping your business grow. Unpaid invoices don't have to knock your business plans off track—reach out to us now and take your first step toward securing your finances and gaining peace of mind.

CONCLUSION

In this article, we've taken a dive into the world of unpaid invoices, a common but critical challenge that threatens the health and expansion of small businesses. By showcasing a real-life success, we've highlighted how strategic debt recovery can dramatically change the game for businesses on the edge of financial distress.

We've explored how late payments can start a chain reaction that affects more than just the business waiting on the money. Our distinctive approach to overcoming these obstacles is what we now offer other small business owners in this treacherous position alongside the hard-earned insights we've gathered from our hands-on experience.

But tackling unpaid invoices goes beyond solving single disputes; it's about strengthening the backbone of small businesses and in doing so, supporting the entire economy. Our commitment to equipping businesses with the necessary strategies, knowledge, and assistance to overcome these hurdles remains strong. Together, we aim to create a business landscape where equity, stability, and growth are not just aspirations but realities for businesses of all sizes.