We’ve written about the problem of late payments before, and we’re happy that the SmartTrade app has helped many small business owners stay on top of who owes them money so they can keep their cashflow going. But it’s not always that easy.
According to a recent study, small business owners have a mind-boggling average of £30,000 owed to them, and six in ten businesses have been negatively affected by late or non-payments. That’s why the PACT scheme was created.
By paying £10 per month or £89 per year, your business can join the PACT scheme. The terms and conditions of the scheme can be included with your invoices, and if a debtor is late on their payment, PACT can send automated emails, report debts to credit agencies, and send the debtor’s name to Defaulter.com, a large database of bad debtors.
Although you may not feel the need to spend money on a scheme like this, it’s obvious that this is an issue in the UK. If there is in fact £30,000 in average debt owed to small companies, that’s over £32 billion that hasn’t been paid, which could cause serious problems not only for the businesses themselves, but the UK economy as well.
If you have trouble getting your customers to pay you, try using SmartTrade to help your cashflow. If that doesn’t work, you may want to consider something like the PACT scheme. If you’ve had any problems with bad debtors, let us know in the comments below! We’d love to hear your story.