LOCAL FIRM BLASTS GOVERNMENT’S ‘NAME AND SHAME’ PLANS AS UNFAIR
Small Businesses Need a Better Understanding of Large Company Payment Procedures, Says Local Accountant
Tamworth – 12th September, 2011 – A recent announcement that the Government is to step in to help small businesses gain prompt payment from large companies, in a ‘name and shame’ campaign being rolled out by the Cabinet Office, although welcome, has been met with concern from a Tamworth accountant who believes the problem often lies with a lack of understanding of large companies’ payment processes. Martin Crook, partner at Albert Road-based Adams Moore, says if small business owners took the time to get to grips with complex invoicing systems of corporate customers, a lot of the late payment issues could be avoided.
“For a small company striking a deal to supply to a large corporate customer, it is a great coup for them and seen as a stable source of income, as well providing the potential for a relationship to grow and for further business. However, large companies have come into the firing line for late payment – a common problem facing small outfits and one that can have far-reaching effects on the business. In my experience in dealing with clients, what I have come across time and time again is the fact that smaller businesses just don’t understand the complex invoicing systems in place and the often rigid procedure that has to be followed.
“The supplier will often have the relationship with the buyer, but the buyer will only sign an invoice off once it’s been through the correct process and if the supplier hasn’t followed this, the invoice can get lost in the ether and this is where the delays begin. Perhaps if purchase order numbers don’t match up, for instance, or the supplier hasn’t referenced it correctly. Accounts departments won’t have time to chase each and every invoice that is submitted incorrectly and these can sit in an in-tray for a while. Add to this the 30, or often 60 day terms of a standard invoice. If problems occur and the invoice has to be re-submitted, another 30-60 days is taken from that date. These kinds of delays can cripple small businesses,” he added.
Crook advises that small businesses must take the time and trouble to learn the correct invoicing procedure of their corporate customer and if necessary, visit the business and speak to the accounts staff on-site so that the requirements are clear from the outset. Crook has had first-hand experience of setting this up for a small business customer, with successful results.
“Of course there will always be exceptions, but I can speak from experience that the invoicing issues are a common cause. The Government definitely needs to do all it can for SMEs if they are to survive, thrive and even grow – but there are many other areas where SMEs are desperate for help – financing being a key area. I don’t think large corporates should always be the scapegoat for the problems facing SME’s,” he concluded.
Adams Moore offers accountancy services for businesses of all sizes, and recently launched a fixed-fee service, Board Support, to enable businesses to access up-to-the-minute accurate advice and support on tap on a range of business and accountancy issues – without the worry about escalating bills when they need advice.
Board Support provides a higher level of service, encompassing accountancy and business advice, for Owner Managed Businesses (OMBs). The service is comparable with an in-house Finance Director, providing on-going help and advice. This means businesses don’t have to worry about bills stacking up or a meter running when it comes to accessing advice during the day-to-day running of the business.
For further information about Board Support, or any other services offered by Adams Moore, visit www.adamsmoore.com or call 01827 54944.
Adams Moore is one of Tamworth’s largest firms of accountancy and business advisers based in the centre of Tamworth with three Partners, five senior managers and a support team including accounts, audit, payroll and client support. Independently owned, the partners have over 60 years’ experience of assisting businesses of all shapes and sizes, providing quality and cost effective business advice. It recently launched Board Support to offer the next level of support for Owner Managed Businesses.
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