Invoicing platform Solna has analysed the data of over 3million SMEs up and down the country to find out which regions are the highest and lowest risk for freelancers and small businesses when it comes to getting paid on time. 121 areas of the UK were scored and ranked based on how quickly businesses pay their invoices.
According to the Federation of Small Businesses, 58% of their members are owed up to £10,000 in late payments from their clients. 15% are owed between £10,000 and £20,000, and an incredible 27% are owed over £20,000 from their late paying clients.
Solna scored businesses from 1 to 5, based on their creditworthiness and ability to pay invoices on time. Businesses scoring 5 have the best credit rating and consistently pay on time, businesses scoring 1 have lower credit ratings and regularly pay late.
All scores were ranked to reveal the lowest and highest risk areas in the UK for late payments.
Late payments: Lowest risk areas in the UK
1. Lerwick
2. Aberdeen
3. Kirkwall
4. Hemel Hempstead
5. Redhill
6. Outer Hebrides
7. Swindon
8. Falkirk
9. Dorchester
10. Dumfries
Late payments: Highest risk areas in the UK
1.West Central London
2.Bolton
3.East Central London
4.Oldham
5.Luton
6.Birmingham
7.Darlington
8.Sunderland
9.North London
10.Romford
“There is a combination of cultural, geographical, and economic reasons why people in more rural areas have better scores than businesses based in London and other urban areas.” says Solna’s CEO and co-founder, Inna Kaushan. “Businesses in a smaller community are more likely to pay their suppliers on time because they’re more likely to know them and becoming known for unreliability could be really damaging to their business in such a small world.”
The current political climate also concerns Kaushan. “Brexit uncertainty has an impact on small businesses in Britain. While the landscape is fluctuating, businesses need to make sure they’re doing everything they can to manage cash flow, prevent late payments, and stay prosperous in order to cope with whatever is around the corner.”
For Inna Kaushan, the knock-on effect of late invoices is a concern. “When a business delays payment because of cash flow issues, they create cash flow issues for their suppliers too. Those suppliers might then delay paying their own invoices, and on and on it goes.”
Inna Kaushan is co-founder of Solna, a smart invoicing platform powered by credit score data. Solna speeds up the invoicing and payment process for freelancers and small businesses. Through leveraged credit data that is overlaid on the platform’s invoicing and reporting functionality, users get a clear picture of their customer’s financial health and their overall exposure to risk. The system’s automated credit control functionality automatically chases overdue invoices – freeing up time and ensuring faster payment.
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