The Economic Cost of Late Repayment

If all companies paid their outstanding invoices tomorrow, there would be a spike in economic growth. It would be like the Olympics, or the Jubilee.

Posted by Harriet Davies

URICA Early payment

Fri 26th, Jun

55 billion. That’s how much is outstanding on invoices in the UK, according to a recent survey. That’s around 3.4% of UK GDP. 

To put this into context, because numbers that large mean nothing to anyone but government ministers and the Forbes Rich List, the value of outstanding invoices in the UK is also equivalent to:

• 75% of total UK business investment in assets for the third quarter 2013
• The amount Russia spent propping up its currency between January and October
• The cash on Berkshire Hathaway’s balance sheet (sparking rumours Warren Buffett is predicting a stock market crash)

The figures above demonstrate that a considerable amount of money is owed between businesses. Assuming that money tends to flow – or trickle – from larger companies to smaller ones, currently weaker businesses provide a zero interest loan to cash-rich larger businesses. And this is surely inefficient.

This cash would immediately have a larger marginal impact on hiring and investment if it were paid, because it would go to businesses with a greater need for these things than for storing cash on their balance sheets (the non-Berkshire Hathaways of this world). And because of the multiplier effect, however much of that money was then spent would have an even greater impact on economic growth.

With only one-third of PLCs paying invoices within 30 days , and conditions showing no signs of improving, cash flow is a real problem for UK SMEs, and that means it’s a real problem for the UK economy.

The average business is owed £38k; at £50k one in four business fail. Around one-third of UK businesses have experienced late payment of 90 days or more. Added to this, valuable time that could be spent planning strategy is spent chasing invoices, according to the Federation of Small Businesses.

Taking these factors together, it is clear there’s a lot to be gained by solving the cash flow problem.

This isn’t to berate larger companies; they are businesses that thrived and grew, and it’s great so many are based in the UK. But they have a lot of buying power and they use it. Therefore the finance industry must be creative in finding solutions and leveraging technology for smaller businesses. It must then get the big companies on board with these solutions. Because the whole of industry has a duty to ensure cash isn’t being locked up inefficiently that could be making a difference.

Sources:
http://www.bbc.co.uk/news/business-26673698
http://uk.businessinsider.com/russia-has-burned-55-billion-to-prop-up-the-ruble–and-its-still-losing-2014-10
http://www.forbes.com/sites/investor/2014/08/12/five-stock-ideas-for-buffetts-55-billion-in-cash/
http://payontime.co.uk/credit-management-advice/why-you-should-pay-your-invoices-on-time

To find out more about URICA early payment

Read More
Leave a comment

Comments...

Posted by ricky

Extraordinary point and clarified well thank you for the post and keep doing awesome godaddy hosting 1$ per month

Posted by payday loans costa-mesa

This post provides each light-weight during which we can easily observe the simple fact. I'm keen on such a blog site. At this point likewise simply click here payday loans costa-mesa Appreciate it intended for giving beneficial facts.

Posted by jay tse

f 'Taiwan independence'. Third, and Song Meiling's health status. Song Mei Ling since 1978, vision, hearing and other serious recession, doctors believe that Taiwan's climate is not suitable for her, and New York weather is more suitable. Song Meiling was regarded as 'Jiang's last spiritual symbol', she went to the United States is equal to the Chiang family's influence in Taiwan's political arena to an end. Taiwan's 'Times Weekly' reported that Song Meiling's name without a little property, there is no income, then these years she is relying on what life, about how much money each year? Song Meiling out of Taiwan politics, the most closely related to Taiwan in New Balance Scarpe addition to her single-handedly founded schools and hospitals, is the 'presidential palace'. Although she was in the United States, in 2003 Taiwan's 'presidential palace' or for its three business staff and two drivers, a total of 416 million yuan NT, the same budget. And the United States in the medical staff, the monthly salary of at least 50,000 yuan per person, Nike Air Max Shoes plus holiday bonuses, 6 people a year at least 6 million yuan. So in order to take care of Song Meiling, spending at least 10 million yuan a year. So courtesy Song Meiling, naturally have its basis. After the death of Chiang Kai-shek, the Taiwan authorities issued the Measures for the Implementation of the Dealing with the Presidential Appointment Ordinance in May 1978, which stipulated that the 'outgoing president' spouse could also be invited to participate in the Timberland Roma Negozio ceremony and two vehicles and two drivers; Personnel 3 or 4 and service charges; Taiwan and outside the medical treatment, including private doctors and health checks for all the costs and as the actual situation by the 'National Security Bureau' to provide security guards. 'Presidential Palace' According to these provisions, in 2003 set a budget of 416 million. It is moncler outlet sito ufficiale noteworthy that, according to the provisions of Song Meiling regardless of Taiwan or overseas, all medical expenses paid entirely by the Taiwan authorities, this is the real sales, there is no limit. However, there are rumors that Song Meiling by the Taiwan side is not all the expenses, more Jiang family that year's 'secret funds', as to how the truth may only Song Meiling their own know. After the outbreak of the war, Song Meiling shuttle between the Kuomintang and the US government high-level middle. On February 18, 1943, Song Meiling became the first foreigner to speak at a joint meeting of the US parliament and Congress. In the United States, Song Meiling deliberately revealed in the words and deeds of some Chinese-style democracy, but the Americans quickly see hidden in their inner dictatorship, once, at a White House luncheon, happened to talk about the United States Miners union is striking, Roosevelt asked Song Meiling, if Chiang Kai-shek encounter this will be how to deal with. Song Meiling did not open, but with nail polish painted Under Armour Curry 3 long nail on the throat to draw an arc. Roosevelt felt the heart of a cold, glad that he was fortunately sitting opposite her, and not sitting side by side on the sofa. 'This is a woman like a hard iron.' Roose Fu later evaluated her.?Perfect livable planet standard When it comes to liveliness, the earth may not be the best Zapatos Canada Goose Brookvale Hoody Nike Shox example. Astronomers have studied the planet of life for a long time after the delineation of a new standard - super livable planet. They also gave us the direction of looking for. While studying extraterrestrial life, astronomers are increasingly focusing on the standard habitat (HZ, habitable zone)

Post a comment