The rise of the 'Stuck-at-Home' SME
For most people, the August bank holiday is something to look forward to, and prime time for a summer getaway. However, according to our recent survey, this isn’t the case for many SME owners, as 57% admitted to dropping their summer holiday plans, or spending the time they are away chasing late payments.
Nearly two thirds of our 250 respondents agreed that summer is the worst time for collecting payments, with more invoices being paid late during the summer than at any other time of the year.
This has significant knock-on effects:
- 1 in 5 SME owners spend up to 3 full working days just chasing late payments during the summer
- 1 in 10 SME owners spend 9 working days chasing unpaid invoices (with that time, they could have gone on a luxury cruise around the Caribbean, had a Safari in Africa or flown to Peru and hiked the Inca trail).
Aside from the summer holidays, SME owners tend to take less than the 21 days statutory minimum of the average full time employee, getting away for just 1-2 weeks throughout the year. In fact, nearly 1 in 10 do not take any holiday at all.
Feeling the stress of late payments
Our survey also found that even when SME owners do take time off, they end up spending at least some of that time chasing payments. With 57% admitting they spend their time away on late payments admin and 61% feeling stressed about unpaid invoices instead of relaxing.
If they did not have to spend this time chasing payments, they would spend that time with family (39%) or would put the time back into their business (30%).
SMEs are the lifeblood of the UK economy, and it’s not right for them to be denying themselves valuable time to recharge their batteries just to chase late payments. On time payment is a right, not a privilege.
Here at GoCardless, we are seeing that many SME owners increasingly value automating the payment process with Direct Debit tools, to relieve stress and give them their time back. This was the approach taken by Founder and MD, Saija Mahon from Mahon Digital, after she found herself spending 5-10 hours a week chasing payments.
As Saija told us: “My main focus is growing my business so my time is far better used focusing on delivering great services, not chasing unpaid invoices.
“Switching to an automated Direct Debit billing and payment system was revolutionary. It has freed up my time to focus on core business objectives, improved my work life balance and allowed me to plan for the future. I now have peace of mind knowing I’ll be paid on time and can concentrate on doing what I set out to do, which is run my own business!”
You can read Saija’s story here.