Payment delays for building contractors are getting longer according to study of more than 7500 companies.
Funding Options, an online business finance marketplace have reported building contractors debtors days are over 42 days on average. This causes serious cashflow problems when invoices are paid late.
The analysis of Companies House data looked at payment information from over 7500 small and medium sized building companies.
The collapse of Carillion earlier in the year sent shockwaves through the building industry and across other vertical sectors, affecting smaller suppliers who will never get their invoices paid. An accounts receivable nightmare.
With high overheads and staff costs many businesses across all sectors cannot afford to wait for long periods for their invoices to be settled.
It is therefore critical for all companies to understand the options available to them to minimise the impact of late payments.
At a starting point, very tight credit control is the key. If handled professionally and conservatively, debtors days can be reduced significantly. The further alternatives other than appointing debt collection agencies would be invoice financing (factoring, for example), crowdfunding and peer-to-peer lending.