Small Business Matters

Late payments continue to hurt small businesses

According to Barclays Local Business’ annual Late Payments report, there has been a 20 per cent rise in late payments, forcing UK small businesses to write off £4.8bn in debt. The figure is up £1.7bn on last year and has meant that small businesses have lost out on a staggering £5bn over the past 12 months. Furthermore, they are owed more than £10bn in outstanding payments on any given day due to suppliers or customers failing to pay on time.

Poor payment practices have long been a thorn in many a small business’ side but the report highlights just how widespread the problem is becoming. Nearly three million small businesses (around 60 per cent) have experienced problems with late payments, representing an additional 850,000 businesses compared to last year. While a rise in late payments is expected during an economic downturn, these figures are still worrying and inexcusable. Small businesses are trying their hardest to get by in the current recession but approximately a third of the organisations surveyed by Barclays (32 per cent) admitted that customers or suppliers failing to pay on time threatened their day-to-day survival. That is because payment is crucial to a company’s cash flow and if not received on time or promptly, it can have a significant effect on the functioning of that business.

Are banks lending to small business customers?

A recent report from the British Bankers' Association (BBA) shows that the main UK high street banks have increased their lending to businesses, both to their existing customers and to customers of other lenders. The level of lending to small businesses rose by £271 million in March, deposits by small businesses increased by £881 million and there were over 52,000 new small business banking relationships established in the month.

This is great news from a small business perspective, as credit difficulties have been top of the agenda for several months. However, in contrast, a recent article in the Times stated that Mervyn King, Governor of the Bank of England, had identified the behaviour of the banks as one of the key reasons that economic forecasts are so uncertain at the moment. The Bank of England’s Inflation Report shows that in two years’ time it is quite possible that the economy will have grown at more than 3 per cent over the previous 12 months, but it is equally possible that it will have shrunk. This unpredictability will be particularly unnerving for lenders.

Video: Small business recession success

Pernille Brunn-Jensen, Managing Director Global Small Business at Intuit UK, discusses how small businesses can succeed in the recession.

Pernille responds to these questions:

* What impact is the recession having on small businesses and why?
* What are small businesses top concerns right now?
* What are the banks doing for small businesses and what more could they be doing?
* What is the Government doing for small businesses and what more could it be doing?

London small business owners growing their way out of recession

According to a poll by Business Link London, around 60% of small businesses in the capital are concentrating on expanding their businesses over the coming year. This ambition comes despite a tough economic environment where nearly three quarters said they have been directly affected by the downturn. Nearly half of respondents (42%) said they plan to exploit new business opportunities while 17% are looking to increase market share through developing new products and services. This is a very promising sign and shows that small businesses in London are keen not to let the economic situation get the better of them and are looking to grow themselves out of the recession. Indeed, numerous recession-proof businesses have already demonstrated that growth and success can be achieved in such a climate. It is also clear from the recent Budget and other fruitless government initiatives that small businesses cannot look to public authorities for support therefore small business owners need to utilise their own resources and business acumen to survive and thrive during this recession. 

Video: Tax issues

Mark Wordley, Intuit ProAdvisor, discusses the recent tax changes and their impact on small businesses in the UK.

Mark responds to these questions:

*What are the main tax concerns for your small business clients at the moment?

*What help is being provided to small businesses to address these concerns?

*What can small businesses do themselves to manage their tax obligations?

Video: Impact of UK Budget 2009 on small businesses

Diana Flier, Compliance Analyst at Intuit UK, discusses the recent UK Budget announcement and its impact on Small Business Britain.

Diana responds to these questions:

* What is the significance of the Budget to small businesses?

* What pain-points did the Budget need to address?

* What measures did the Budget include that will help small businesses?

* Were there any measures which will have a negative impact?

* What was missing from the Budget?

* So how did the Budget fare overall in terms of meeting expectations?