Deloitte comments on the Payments Council decision to keep cheques

The Head of Payments Risk at Deloitte Stephen Ley commented on the Payments Council decision to keep cheques and cancel the 2018 deadline by saying;

“The Payments Council’s decision to retain cheques will be welcomed by many, but particularly by charities, small businesses, the elderly, schools, and other organisations that rely heavily on this payment method….”

He added; “That said, the use of cheques is continuously declining, and will eventually stop. This presents a challenge for the industry to manage this decline and find a suitable alternative that meets the needs of those that currently use cheques. Possible solutions may lie in using innovative and suitable technology replacements, for example, person-to-person mobile payments.”

Mr Ley didn’t add that the decision to keep cheques will also delight those businesses who still use cheques as a delaying method to spin out suppliers.

When we take into account that the latest figures from BACS on late payments they make for some harrowing reading for UK SMEs. The figures, released in May, show that altogether around £24bn is owed to SMEs in the UK. As mentioned in another CCDR blog post, the bulk of this £28bn is owed by large corporates who are amongst the worst offenders

Good (positive) cash flow is essential to the success of any business and at the present moment it is even more critical to business survival amid a backdrop of uncertainty and increased costs.

While it is tempting not to upset good customers by chasing bills, late payers can, and have, forced profitable SMEs to the wall. Poor cash flow is still the UK SME’s biggest killer and despite numerous past and present government war cries and sound bites, there is still £24bn owed in late payments. You don’t have to be forceful or rude to be paid but you can ill-afford to shy away when your creditors will be chasing you.

During the silly season, or summer holidays, late payments can become particularly troublesome as the classic excuse of ‘The person who signs the cheques is away’ is often rolled out.

Tired of Excuses?

Whilst there are some general tips such as ensuring your invoices are correct and phoning ahead to ensure they have been received at the other end some debtors are stubborn.

CCDR offers an Outsourced Credit Control solution which effectively gives you an experienced and professional in-house credit control and accounts team but without the cost.

Outsourced credit control lowers late payment problems and reduces the onset and impact of bad debt. By pro-actively managing customer credit limits, invoice monitoring and chasing payments (all in your name), we can use our professionalism and experience to retain the customer satisfaction and experience of your customer base, whilst reducing your debtors days.

Many people have the perception that Outsourced Credit Control leads to increased debt recovery but in fact the opposite is the case.  By managing your late payers professionally and not giving them the chance to offer excuse after excuse, bad habits can be reduced and the onset of late payments getting out of hand is reduced at source, rather than letting the problem fester, with the amounts and/or the overdue days spiralling out of control.

And as with all our Outsourced Credit Control services, we don’t act without agreeing anything with the client first. We offer advice yes but the decision to pursue debt recovery is always our customers, and not ours to make.

CCDR have a large UK and international client base and we can offer a  range of services from no-collection no fee Debt Recovery and Commercial Debt Recovery, Credit Reports, Debtor Tracing or as per the subject  of this blog post  Outsourced Credit Control

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