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Micro-businesses at risk from slow-paying clients

20th Aug 2015
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Award-winning accounting software for small business owners and their accountants and bookkeepers.

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  • 1 in 8 (13%) micro-business owners have had to wait a year or more to get paid by a client

  • Almost half (46%) have had to wait 2 months or more to get paid

  • Almost 9 out of 10 (86%) micro-businesses that issue invoices have been paid late

  • Almost a third (31%) will wait for a month or more before chasing up an overdue invoice

New research from innovative cloud accounting provider FreeAgent has revealed that one in eight (13%) micro-business owners in the UK has had to wait a year or more to get paid by a client.

FreeAgent, which provides a multi-award winning cloud accounting system for accountants working with micro-businesses, highlights that many micro-business owners are struggling with the issue of late payment - with 46% of those surveyed saying that they have had to wait 2 months or more to get paid by a client.

The research, which was carried out on behalf of FreeAgent by YouGov, found that 86% of micro-businesses that issue invoices have been paid late by a client.

And the poll also suggested that some respondents did not view chasing late-paying clients as a matter of urgency. Almost a third (31%) 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% said they would chase an invoice within the first week after it was due.

Ed Molyneux, CEO and co-founder of FreeAgent, said: “Late-paying clients can create major cash flow issues for micro-businesses and our research shows just how prevalent this problem is. Many UK micro-business owners are having to wait for long periods of time before getting paid, but they are also not chasing unpaid invoices fast enough.

“Small business clients often find it awkward to chase late payers for money, but it’s important that they follow-up from the moment that their invoice is overdue. By providing your small business clients with the right tools that enable them to stay on top of their invoicing - and automatically chase up overdue invoices - you can help alleviate this problem. Using a cloud system like FreeAgent provides you with greater clarity over your clients’ cash flow, so you can check what they’re owed and help prevent their businesses from suffering.”

To find out more about FreeAgent visit their website or call 0800 025 3900.

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 505 owners/ partners in micro-businesses. Fieldwork was undertaken between 1st - 9th June 2015. The survey was carried out online.

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