Accountants Suffer in Lockdown
In the midst of lockdown 2.0, closing non-essential businesses means impacted revenue and bottom lines for many companies once more. For accountants and clients, the challenge of chasing payments and maintaining budgets for day-to-day operations continues to be a hurdle we need to be capable of leaping.
Firms are still trying to overcome the impact of delayed payments from the first lockdown – studies show 38%of invoices were at least ten days overdue. As the effects of delayed payments are graver for small businesses, sole practitioners, and freelancers, an affordable, easy and effective way to manage late payments is needed now more than ever.
Lockdown impact on late payments to businesses
Small-to-medium businesses (SMEs)
Even prior to the pandemic, SMEs were more vulnerable to delayed payments and suffered from this avoidable obstacle more frequently. Whether the cause is the late collection of monthly payments from invoices or third-party pending payments, inhibiting cash flow impacts your ability to cover daily expenses. A study of 250 small business owners found four in 10 use a payment company to bill clients and customers. The amount of additional fees this incurs and the holding of incoming payments before cleared funds are made available to a business equals a big loss – in cash flow and opportunity.
With the tightening of restrictions over these four weeks, if not longer as we hear of a more restrictive tiered system, being more hands-on when it comes to keeping on top your incoming and outgoing payments can help you manage the inevitable negative effect on cash flow. Use Ordo to bill clients easily without the high transaction fees, and as Ordo tells you when your client has not only paid your invoice but also when they read it, tracking payments and knowing where you are, at least, will be a piece of cake; and your client will have less of a reason to delay payment once they’re also notified the moment you send them your invoice.
Government restrictions are a blow for the hospitality industry with its call to shut down hotels and restaurants. Mounting debt for rent and unavoidable fixed costs and being unable to pay suppliers and staff are just some of the setbacks the hospitality industry continues to face. The summer peak season for tourists and visitors has been and gone with restrictions having made that a summer like no other, only to be followed by the next peak season for Christmas looking just a bleak this mid-winter. Millions of pounds will be lost by the industry counting holidays alone.
To soften the blow, use the time now to look at what you need to do to survive once you can open again. Get hold of your costs, save yourself time and money by using a technology savvy service like Ordo, a payment service that’s up to 90% cheaper than taking card payments and more secure than accepting bank transfers. It will lessen your compliance burden by ensuring you’re following best practice for keeping your clients safe and giving them peace of mind they’re paying the right person, and payments are reconciled automatically, meaning those old admin hours of chasing and allocating payments can be put to better use in strategising and building a plan of action for your business’ future.
Freelancers and Gig workers
Freelancers make up 15% of the UK’s workforce. Since the first lockdown, issues like abandoned and paused projects, late payment of invoices, and companies unable to pay contractors have plagued those that are less protected against macro shocks on business like pandemics. Fortunately, UK gig workers have access to financial support and government aid with the Coronavirus Self-Employment Income Support Scheme (SEISS) and which you accountants have been asked to advise on countless times since March. While lots of freelancers are eligible, many individuals and small business owners still lost work and income, and in turn, they are going to struggle to pay their suppliers, often those same accountants, meaning the whole supply chain needs to ensure it’s as efficient as possible in all senses.
Coming up with ways to better streamline your operations can help you stand a better chance of staying afloat during this time. Automate the admin in your business that sucks time for no value - utilise technology that enables you to track the invoices you’ve sent, and who’s paid and who hasn’t. An automated payment transaction app like Ordo can help you save time and effort on billing while staying in control of when clients have sent, read, and paid your invoice.
Call to action
With access to technology, there’s no reason delayed payments should run up to 10 days overdue. Use Ordo to reduce the hassle overhead when it comes to your month and year end billing. Invoices can be approved automatically, saving days or weeks at a time to reconcile payments. After all, every day a payment is delayed and you don’t know what’s going on, is another day that your business and personal life, and mental health and wellbeing, suffers.
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Ordo removes hassle & headache from payments, making getting paid easy. Ordo means reduced costs, immediate money transfer, automatically reconciled payments, invoice security, and happy customers. We’re FCA authorised (FRN836070), invested in by Nationwide Building Society, the former Faster Payments leadership team & CGI partners.