GoCardless has partnered with the Federation of Small Businesses (FSB). Together they will help small businesses tackle the ever-present issue of late payments. Last year, the FSB released research, Time is Money: The Case for Late Payment Reform, that indicated that in 2022, 52% of small businesses experienced late payments. Perhaps more worryingly, 25% report increased issues around late payments. In 2022, the UK Government estimated that SMEs were, on average, owed £22,000 in late payments.
In turn, the FSB believes that this leads to severe cash flow issues. Which its report indicated led 37% of SMEs to take on credit to better manage the cash flow issues. This additional risk also leads to an impact on the mental health and well-being of business owners as the additional risk raises stress levels.
The partnership
This partnership will see GoCardless sponsor the recently launched FSB GoCardless Late Payments Hub. GoCardless will also provide additional collateral and advice for the hub. This will include information on how FSB members can take control of how and when they get paid. The partnership will also see FSB members getting cost savings and support when they sign up for the GoCardless online payments platform (subject to eligibility).
Nicola Hamilton, VP of Marketing, Brand & Communications at GoCardless, said, “Small business owners are waiting too long to get paid, and the cost of receiving what they’re owed is simply too high. Hours spent chasing payments quickly add up, and small business owners often opt to let a late payment go rather than having that awkward conversation with a customer. This needs to change.”
“We’re excited to work closely with FSB to put small business owners back in the driving seat when it comes to collecting their hard-earned money.”
Caroline Lavelle, Chief Commercial Officer at FSB, said, “Small businesses are the backbone of our economy, but for too long their growth has been stunted by the scourge of late payments. Late payments can affect mental wellbeing alongside the financial strain. While there are wider issues at play, which FSB is campaigning on to address, there are practical steps that many small businesses can take right now to reduce the burden on their bottom line. I hope this new online hub will be a welcome resource to help our members with their financial wellbeing.”
The FSB GoCardless Late Payments Hub
The hub consists of several blogs already that will assist:
- Standing order vs. direct debits: Which payment method is right for you?
- How to get the most from using Direct Debit
- How much time and money could you save on payment collection?
- What is the process for debt recovery?
- What legal action can I take to recover debt?
- How your small business can deal with late payments
FSB Members can also access a GoCardless area to see whether they are eligible and sign up for the GoCardless facilities. GoCardless offers several features that enable businesses to take better control of their payments collection. Payment collection services include:
- One-off subscriptions, invoices and instalments powered by bank debit
- Instant Bank Pay, ideal for one-off payments
- International payments collected from 30+ countries
Enterprise Times: What does this mean
Cash flow is the main cause of demise for many small businesses. Any help or guidance that SMEs can get to alleviate late payment issues is welcome. While the conservative government launched a review into late payment legislation it has not been completed, nor has legislation followed.
While partnering with GoCardless, it does offer further support for SMEs in terms of advice and access to discounted services from GoCardless. The discounts offered are not made public. Also, it is unclear whether, by partnering with one Fintech, the FSB has signed an exclusive partnership. Or will it welcome other payment companies to offer members a choice?
The online hub is a welcome resource. GoCardless sponsored the three latest blogs, and all were added in May this year. Therefore, can members expect additional blogs with further advice? What will keep this hub updated?
