Recent figures released by European payment supplier Sage Pay highlighted a huge problem that has hindered the progression of businesses for some time now; the issue of late payment on invoices

According to Sage Pay, an estimated £55 billion is currently owed to businesses across the UK, a figure which has jumped by a staggering 52% since the summer of 2013. Separate data also indicated that the average business is now owed £10,000 from outstanding invoice payments whilst 20% of smaller businesses are currently owed over £30,000. 

According to Sage Pay, this situation is the result of many company directors failing to optimise their invoice practice and utilise new software to encourage early repayment, with their research illustrating that 67% of businesses are still using a paper invoicing system and subsequently wasting weeks of their time chasing up the payments. 

This can have a hugely detrimental effect on the financial stability of a business because late payment can lead to businesses subsequently putting themselves at risk of spending more than they have coming in and this is a recipe for disaster and could lead to insolvency

 “The majority of invoicing is still done via paper and post,” said Simon Black, chief executive at Sage Pay.

“Given the environment, we’re now living in, this process is not only antiquated, it’s actually depriving small businesses of critical revenue. For smaller businesses, in particular, this delay in payment can cause significant problems and can affect the overall performance of the company.”

As such, it is of paramount importance that company directors are constantly monitoring the new invoicing software which is released on the market because the potential for improvement from utilising these platforms are immeasurable and moreover many can be acquired with minimum outlay required. 

One such new software platform that has been released to widespread acclaim is the new URICA software which enables businesses to allow their suppliers to cash in their invoices prematurely, alleviating the burden of late payments on them. 

With the platform, suppliers can acquire payment from their invoices just one day after sending it out, whilst the client receives as long as 75 days- or 3 months for international customers- to clear the debt with URICA. 
The architect of the new software is Lindsay Whitelaw, who created the platform in order to alleviate the financial strain on businesses and suppliers across the supply chain. 

“The current growth in the economy is set to cause real pressures down the supply chain,” said Mr Whitelaw. “Extended payment terms not only stretch the guys at the bottom, they mean that the smallest businesses in the economy end up supplying funding to the big business through delayed payment terms.

“That’s part of the unbalanced nature of our economy. As the economy grows, this will become even more painful.”

As an incentive for utilising the URICA service, a discount is often agreed for the invoice ranging anywhere between £80 and £300 on invoices as much as £10,000. 

“We have turned the traditional funding model upside down because we have no interest in the creditworthiness of the supplier,” said Mr Whitelaw. “That means we can pay early cash to tiny little businesses that would not be able to access this kind of funding anywhere before. The only criteria we require, other than a valid invoice, is that the company which offers the early payment to its suppliers must be a solid business with a strong track record.”

It is hoped that the new software platform will assist businesses to stabilise their finances by lowering the amount of debt they have outstanding from late payments to suppliers. The extra time that they are given in order to pay back their invoice debt through URICA means that cash flow forecasts can be upheld and companies across the supply chain benefit from an improved procedure of processing invoices. 

“The last thing that businesses want is more debt,” said Mr Whitelaw. “We provide cash, unlike 
 or invoice discounting, which just heaps on more debt.”