When self-employed, every penny needs to be accounted for. Everything that’s going in and going out, many sole traders need to keep a close eye on their money and budget for the next mont of work accordingly. Sounds simple right? All you need to do is spend less money than what’s coming in!
But, with a family, unforeseen problems and bills to pay, it’s not always that easy. Especially when late payments come into play!
Becoming more and more common, late payments are becoming a real issue for self employed workers. In fact, according to the Federation of Master Builders, one in three payments to small businesses or sole traders arrive late. And it’s not just a few quid here and there either. In fact, the Federation stated that the average late payment is worth around £6,142!
And missing an extra six grand you thought you’d have this month can really end up causing financial problems for self-employed workers. The Federation of Master Builders described that these late payments have caused businesses to run into cash flow problems. And, 30% have even ended up going into an overdraft.
Not only that, but according to further statistics, this sum of money is quickly stacking up. In fact, small and medium sized businesses have actually been found to be owed billions of pounds in late payments! Take a look at the full report here.
Have you ever ended up having to dip into your savings or into an overdraft to cover the cost of a late payment? And how do we even being to solve this?
Well, the Federation of Master Builders highlighted the position of larger business in this late payment issue. They described that these firms use their bargaining power to get away with paying late. They recommend that these companies need to be named and shamed. Or, they’re going to carry on doing it.
And, if that doesn’t work, or you’re dealing with a smaller sized business, there is always the opportunity to take them to small claims court.
So what do you think of this? Do you struggle with late payments? Who’s your biggest culprit? Let us know in the comments below.