Most SMEs have to deal with late payment and non-payment more regularly than they’d like.
Research suggests that 88% of UK companies are affected by late payments, and UK SMEs are owed £225bn in overdue invoices. Waiting for payments has a huge impact on cash flow, it can leave you struggling to pay suppliers, staff wages, cutting your own salary, and not investing in growth. It gets serious too - according to a report in Accountancy Age, “50,000 businesses fail each year due to late payments”.
Invoice insurance explained
Whatever sector you’re in, you put a lot of time and effort into maintaining your client relationships, but late and non-payment puts a massive strain on your bottom line. Even if a client has been reliable in the past, the situation can change without much warning.
A client could struggle with their own cash flow or go into administration, which is particularly problematic if they represent a large part of your revenue and you find yourself losing a significant paying customer.
If one or more of your invoices are left unpaid, invoice insurance will make sure you get your money anyway. You’ll be covered for invoices, and will be paid 90% instantly if your clients can’t (until the rest is collected). You can protect individual or multiple invoices, it’s up to you.
The impact of unpaid invoices
Non-payment leaves SMEs like yours in a difficult situation. Your invoices are usually billing for work already completed, meaning you’re already out of pocket if the client can’t pay. It’s a big waste of your time and resources, and damages cash flow.
Negative cash flow can make it harder to get credit, buy inventory and supplies, as well as pay bills, suppliers, wages, and more.
You can trade more confidently
Confidence is massively important for SMEs because it brings stability. It helps you make bolder decisions, plan your future growth, and work freely with the clients you want to work with.
According to research in the Global Banking & Finance Review, 50% of surveyed SMEs believe ‘aged debt’ has stopped them from growing and investing in their future.
Without the anxiety of late and non-payment, your business can be ready for anything and develop how you want it to, rather than what you feel limited by.
With invoice insurance, the potential for financial loss is massively reduced and your cash flow is protected. Instead of being one of the 43% of SMEs regularly dealing with outstanding payments in 2018, you could be part of the 57% that aren’t!
Cut down on invoicing-related admin
When you don’t need to run around after invoices, you and your team have more time to focus on what really matters - growing the business, impressing clients, and being the best at what you do.
Getting paid should be simple. Hokodo insurance solutions give you peace of mind, so you can focus on what matters most - your business’ success.
Get a quote to protect your invoices.