Four out of ten UK SMEs are now taking more than 90 days to pay their contract staff, according to new research from Sonovate, a leading provider of embedded finance and payment solutions for casual workforces.
More than two out of five UK SMEs are now struggling to pay their contract workers on time as a result of cash flow problems in their businesses. In contrast, similar Sonovet research conducted in the summer of 2022 found that only a quarter of SMEs at that time failed to pay their contractors on time and the same proportion took more than 90 days to process payments.
Two-thirds of the SMEs surveyed say that late payments from customers negatively impact their ability to pay contract workers on time. Again, this is worrying compared to last year, when only half expressed that late payments deterred their ability to pay contractors on time.
Statutory payment obligations that, unless an alternative payment arrangement has been agreed by both parties, pay the supplier within 30 days of receipt of an invoice for any goods or services provided to a UK business Have to do These rules apply to customers paying SMEs in the same way as they apply to SMEs paying their own suppliers, including contract workers.
Richard Prime, co-founder and co-CEO of Sonovate, comments: “Whether it is the intensification of the ‘cost of doing business’ crisis that we have seen over the past year, or the persistently inadequate service of existing lenders to the SME sector, we With the economy still experiencing chaotic cash flow ripples, a growing army of contractors in the UK are bearing the brunt, waiting more than three times longer to get paid for their services. Change has to happen, and quickly.”
The persistent late payment of accrued wages to contractors results in a universally damaging effect on the UK SME community. Half of Sonovate’s SME study respondents say they may be losing quality contract talent because of payroll issues, and more than a third say they’ve fired contract workers as a result of not being paid enough on time also lost.
Sonovate’s research focuses on exploring the funding and fintech options available to SMEs and what works best to meet their payroll needs. More than four out of five SMEs say that multi-currency invoice financing tools allow them to operate more efficiently across multiple markets, and more than half say that adopting fintech tools such as payroll or accounting tools help them to be more efficient. Will help you become more efficient. In contrast to high-street banks, 40% of SMEs agree that it is easier to access finance from a fintech lender where embedded finance is more widely available and payments can be made more easily. 70% say they believe their business would not have survived the current crisis if alternative finance options were not in place.
Prime continues: “On the strength of our ability to anticipate the changing needs of SME and enterprise-level recruiters, especially when it comes to paying contractors and flexible workers – and on the basis of our ability to provide on- But, Sonovate has emerged as a leading challenger to traditional funders. Demand, embedded finance that’s flexible to match. Whether it’s focusing on quick decisions, same-day finance or timesheet and workflow automation, we companies are able to focus on securing the best talent to build their business, with the confidence that funding will be available when they need it.
The research comes at a time when working on a contract has never been more popular. Recent figures published by IPSE show that there are 150,000 more self-employed people working in the UK today than 12 months ago.
Prime continues: “It is not acceptable to assume that, as the contract labor population continues to grow, businesses will be able to escape slow payrolls. It does not arise from the evidence that we are seeing. As the contract labor market continues to expand, it is maturing rapidly and contractors are not afraid to speak up for the terms and conditions they expect. Talented contract workers are highly sought after, hard to retain, and will vote themselves out faster than any other generation of workers who came before them. SMEs need greater control over their payroll capacity to ensure that the best people working for them stay close and continue to add value.
Source: www.bing.com
