In any company, receiving payments late can be frustrating and inconvenient. For small business owners, however, the consequence can result in staff not receiving their salary, the company going into overdrafts, or even declaring bankruptcy. In short, slow payment collection can mean the company itself pays the ultimate price.

The Federation of Small Businesses (FSB) estimates that 80 percent of its members are being paid late, and a third said that payment terms had “deteriorated” over the past two years. A third of all payments are late with dire repercussions; 50,000 firms are forced to close each year at least partially due to poor payment timeframes[1].

A separate study found UK small business owners spend 10 percent of their working day chasing payments, with a quarter having “aged debt” exceeding £20,000[2]. Overall, late payments cost small businesses more than £2 billion a year[3].

“Supply Chain Bullying, Pure and Simple”

The chairman of the FSB claims that the UK supply chain is set up to bully small businesses through late payments. “Many large firms appear to be using the disparity of power in business relationships to squeeze their suppliers, delaying payments to improve their own cash flow,” Mike Cherry said in June this year­. “This is supply chain bullying, pure and simple.”

Small businesses do not have to be held to ransom by such tactics, however. Here are four payments solutions allowing companies big and small to collect quicker.

1. Sage One

At one time, accounting software was complicated and clumsy. It was also commonly more fitting for large enterprises than small businesses. Now, there’s a vast variety of accounting software that’s been created specifically for SMEs and self-employed people. Importantly, many of the solutions are cheap or even free.

Sage is the UK’s leading business software provider, and Sage One is its accountancy offering for small businesses. It can help you with everything you’d expect, like invoicing, cash flow, and payroll.

2. PayPal

PayPal has developed into one of the most trusted payment platforms online. It allows you to accept payment in foreign currency and then handles the currency exchange process for you for a minimal fee.

It benefits small business owners and freelancers alike by facilitating an easy setup and allowing you to create and send invoices right through your account, with fees coming in below than many merchant accounts. More importantly, though, your customers are likely to be familiar with the platform and they don’t need an account to pay you, so the paying experience is streamlined. Now, PayPal is beginning to accept Bitcoin so that you can make and accept cryptocurrency payments.

3. DocuSign Payments

One of the reasons for late payments is due to payment collection and signature being part of the same agreement process yet completed in two separate and disjointed steps. With DocuSign Payments, users collect and sign at the same time for instant payment. This means business owners can spend more time growing their business rather than manually chasing up agreements. 

DocuSign Payments are flexible – payments can be requested in fixed, formula-based or signer-determined amounts, for example – intuitive and secure. Compare this to the challenges of paper invoicing and it becomes clear why SMEs need to take greater ownership of their payment processes if they are to be paid sooner rather than later.

4. Square

Square is a credit card processing company that offers a way for small business merchants to receive credit cards without experiencing the charges of many other point-of-sale systems. You can accept credit cards anywhere and process gift cards with their free magstripe reader that works with the Square app on smartphones and tablets.

Features include fraud protection and deposits on demand with payments received in your bank account in one to two business days. You only pay per transaction with no set-up or monthly fees.

Square is a credit card processing company that offers a way for small business merchants to receive credit cards without experiencing the charges of many other point-of-sale systems.

DocuSign is bringing the acceleration and simplification of e-signature to the rest of the agreement process. Payments is just one area that small business owners will see streamlined in our vision for a fully digital, modern System of Agreement. To learn more about growing your business quickly and efficiently with DocuSign, watch our on-demand webinar.

[1] https://www.pymnts.com/news/b2b-payments/2018/supply-chain-management-uk-smb-late-payments/

[2] http://smallbusiness.co.uk/small-business-owners-preoccupied-chasing-payments-2533478/

[3] https://www.independent.co.uk/news/business/news/late-payments-uk-business-cost-sme-2-billion-a-year-bacs-payment-customers-a7846781.html