The long payment delays to repairers has been laid bare in new research carried out by money.co.uk.
Analysis of figures from the Department for Business and Trade has revealed that automotive aftermarket repairers wait an average of 37 days to receive payment for services carried out.
This places the sector second in the overall list, behind manufacturing (47 days) and level with agriculture and water supply.
The UK standard for payment to customers or businesses is 30 days, with 54% of organisations contractually agreeing to meet this time period.
The news comes after the government announced a crackdown on late payments as part of its Small Business Plan. The initiative is intended to ease the financial strain on businesses by easing cashflow worries caused by delayed payments.
Overdue invoices
Joe Phelan of money.co.uk said: “While overdue invoices might feel like an inevitable part of running a business, there are ways to mitigate their impact. By adopting proactive measures and leveraging financial tools, SMEs can build resilience and protect their operations from the risks associated with late payments.
“Using a business credit card effectively, for example, can be a lifesaver when payment schedules don’t align. The key to this is thinking of the card as a short-term buffer rather than a long-term crutch.
“Start by choosing a credit card that offers longer grace periods – some providers do this for new customers. You should also look for cards that provide zero or a reduced introductory APR, especially if you anticipate carrying a balance from time to time. And, if they offer cashback or rewards, that is even better, as this can offset some of your expenses.”
Timing
Phelan continued: “Timing can be everything, so align your credit card payments with your income schedule as best as possible. For example, if you’re typically paid mid-month, set the card payment to be due later in the month to avoid late fees.
“Lastly, remain disciplined and make sure to pay off the balance in full wherever possible. It’s well known that credit cards can accrue interest very quickly, depending on your interest rates.
“It’s also better to use accounting software to manage these payments, as manual methods can lead to human error. And remember, a credit card should supplement your business’s financial plan, not replace it.”
