Late Payments

Late payment is inexcusable, shameless and completely unfair. Independent professionals don’t receive regular income like employees and therefore rely on being paid on time to keep their business afloat.

Dash for cash leaves self-employed workers chasing £200 a month in late payments: The self-employed workers who keep Britain’s houses clean, tidy and well-maintained are among those owed £208 in an average month by customers who don’t have cash in hand to settle bills.

This means that the UK’s sole traders - including many cleaners, decorators and gardeners - are chasing nearly a fifth (18%) of their earned cash income each month, significantly impacting their cash flow and forcing them to spend time recovering debts. The figure rises to £1,846 for other small businesses with between one and nine employees.

Despite having the best intentions (86% of us agree that paying small businesses on time is important and 57% would prefer to pay by cash) 28% of us regularly have to dust off cheque books, make a dash to the cash machine (44%) or simply pay late (17%).

But the dash of shame to the cash machine to get money to pay Britain’s one man bands – or the red-faced “I’ll have to pay you next time” - could soon be a thing of the past.  Paym, the easy way to pay small bills, friends and family using just a mobile number, is available to more than 90 per cent of UK current account holders – and tradespeople can get paid straight to the number on their business card.

Craig Tillotson, Managing Director of Paym said: “Window cleaners, gardeners and decorators are facing challenges from well-meaning customers who often don’t have the cash on them to pay there and then. Paym is an easy alternative to accepting debit and credit cards which we know many of these types of business resist because they find them expensive or inconvenient. It will be a massive help with time-poor customers.

“We know that many small businesses rely on their mobile to run their business – and Paym makes it possible to use that vital phone number to easily accept payments. We’re urging businesses and self-employed people to sign up today and to spread the word amongst their customers – it should help both parties avoid awkward situations or inconvenient trips to the bank.”

Paym in action – case study

Tim Sutton is a sports therapist who offers massage and treatments that cost roughly around £30 per session. He currently has 1,500 customers on his database, treating around 30 people a week. The summer period is a busy time for Tim as more people venture outside for sporting activities.

He has been using Paym for nearly a year, originally for personal use but has now introduced it to his business. As a small business Tim used to only accept cash or cheques, not wanting to invest in and carry around a card machine.

Tim is a huge fan of Paym, he says: “‘Paym is perfect for my business and customers. Not only does it save me multiple trips to the bank, there’s no need to carry around handfuls of cash. It is quick and easy to use and my clients now only need to know my phone number.”

Payments are made through Faster Payments or LINK at the same speeds as existing current account, online, and mobile payments – most payments arrive in seconds.

The research from Paym also looked at how we as a nation rely on self-employed people such as our window cleaners and electricians, and how much we pay them for their services: Paym is an easy, secure way to send and receive payments to a current account using just a mobile number. Paym means there is no need to ask for other people’s sort code or account number, or tell them yours.

Other key findings from the research:

Young people (18 to 34-year-olds) are the most likely to make the dash for cash; more than half (56%) have done it in the last year, compared to just one in three (33%) of those aged over 55. One in six (17%) have paid a small business late because they didn’t have cash on them - which rises to 26% of those aged 18 to 34. 23% of sole traders have given up chasing a payment and 30% of sole traders have stopped supplying a customer due to consistent late payment.

Options for chasing late payments: Late payments are an increasing problem for small businesses. So, when the normal channels of chasing invoices have failed, here are some of the options available to ensure your finances remain solvent.

Go legal:

Federica Monsone, owner of network storage provider A3 Communications, decided to contact a solicitor after a client had ignored three invoices she had sent them. ‘My options seemed to be that I could either hire a debt collector, which I felt would cost too much money, or write the debt off,’ she says. 

For Monsone, neither of these options seemed cost-effective, particularly as writing the debt off would be no guarantee of future contracts with the client. ‘It seemed to me that the company was struggling so I was doubtful whether we would even get any more business from them. And even if we did, this might have been the first of many non or late payments.’

After doing some research Monsone eventually found a solicitor who wrote her client a legal letter demanding payment. She says: ‘This only cost £100, but it made us look serious enough for them to consider that there may be legal ramifications if they didn’t pay. I recovered all the money minus the interest they owed.’

Don't mess around:

Carl Hackman, director of debt collection agency CCI Legal, says that over the last two years there has been a growing demand on the part of small businesses for using their services. The company typically charges ten per cent of the total amount recovered. He says: ‘Small companies often don’t want to upset their larger clients. So by using third-party intervention it's diplomatic and tactful and in everyone’s interest.’

Hackman adds that the advantage for a small business with this approach is that it has a better chance of retaining its client, as the company is only paying what it owes. ‘No late charges are incurred and our fee is paid by the small business,’ says Hackman.

Alternative options:

Benjamin Smart, regional manager of Business Link London, suggests there are other things you can do before taking legal action or calling in a third party. He says it is a good idea to visit the company first and find out if there are any discrepancies with the outstanding balance.

‘This should be followed up with a phone call to set a date and standing order for when the money is due to be paid by the client,’ says Smart. 'If it is a large amount of money, say around £100,000, this is the point where you can get the bank to bring in invoice financing. If the company doesn’t follow through with the payment the bank pays 90 per cent of the money upfront to you, and then chases the debtor with legal action.’

Kick up a fuss:

In a landmark victory for small businesses, Justine Thompson, director of training company MTa International, took on pharmaceutical giant Boots for extending its payment policy to 75 days and charging a 2.5 per cent processing fee. She says: ‘As soon as we started to get the media involved and I had agreed to speak on the radio, they backed down and changed their terms back to 30 days with no 2.5 per cent fee.’

But Thompson is sceptical about the options currently available to SMEs. She says: ‘I don’t see debt collection as being any better at gaining leverage than legal options; when SMEs start to kick and fuss they are in danger of losing their clients. I was fortunate because I wasn’t in a position where I was reliant on the Boots contracts.’ For Thompson, small businesses need to join together to fight larger organisations. ‘It’s not just a business issue but a moral and ethical one too and it’s not something they can fight on their own.’

Self-employment body supports calls to end late payment scandal: IPSE, the Association of Independent Professionals and the Self Employed, has today supported calls from business groups, the FSB and IoD, to put an end to the scandal of late payment.

Simon McVicker, Director of Policy and External Affairs at IPSE, said: “Late payment is inexcusable, shameless and completely unfair. Independent professionals don’t receive regular income like employees and therefore rely on being paid on time to keep their business afloat.

“Late payment is a key issue for the self-employed which is why it is at the forefront of our manifesto. The Conservatives are taking steps in the right direction by acting on IPSE’s proposal for a small business conciliation service and enforcing the Prompt Payment Code, but we still must put pressure on big businesses to do the right thing when it comes to paying their suppliers. We would like to see all the major Parties agree to this before the General Election."

A survey commissioned by IPSE with ComRes shows overwhelming support from the general public to tackle the problem of late pay. The survey asked 1,000 ‘traditional’ employees and self-employed professionals in the UK’s most marginal constituencies and found 79% support strengthening rules to prevent this issue. The survey also found 78% of people support developing a way for small businesses to settle disputes without court action. 

Simon McVicker added: “IPSE stands with the IoD and the FSB in tackling the scandalous problem of large businesses bullying suppliers by enforcing long payment terms. “Our research shows that the general public overwhelmingly support proposals to end the scandal of late payment and we hope big businesses will wake up to public opinion. 

“Late pay means microbusiness owners get caught in a catch-22 situation - they rely on regular pay but can’t excessively chase payment because it ruins relationships. We will continue to work with Government and business to ensure the culture of payment is radically changed across the board.”

New Pingit App' Aimed At Paying UK Window Cleaners

Transferring cash to be as easy as texting a friend thanks to new smartphone app: Transferring money could soon be as easy as sending a text, thanks to a smartphone app released today. It allows people to send up to £300 by entering the recipient’s mobile phone number, removing the need to know sort codes and account numbers. The free Pingit app is the latest hi-tech challenger to the cheque. It transfers money instantly, allowing the recipient to withdraw it from a cash machine straight away.

The system has been developed by Barclays, but will be available to customers of other banks and building societies from next month. At first it will only allow individuals to transfer cash to each other, but there are plans to open it up for use with businesses and charities. In order to send money, customers must have a smartphone such as an iPhone or BlackBerry and download the Pingit app.

They must also enter their account details and set up a  five-digit PIN. Those receiving a Pingit transfer do not need a smartphone themselves, but must be registered for the service. Barclays said the technology had ‘huge potential’, with 50 per cent of the population expected to have a smartphone by the end of the year. The bank’s head of current accounts, Dan Wass, said the app was ‘the first service of this type to be launched across Europe’.

He added: ‘It is like having a bank in your pocket all the time. It allows you to send payments to anyone in the UK, simply by knowing their mobile number . . . [it] makes sending and receiving money as easy, quick and convenient as sending a text. 'Payments such as sending money to children, for a birthday or spending money, or even to a window cleaner, can be made in seconds.’At first, only over-18s will be able to use Pingit, but the age limit is likely to be lowered in the coming months. Barclays stressed that the system is secure, and said that if a customer’s mobile phone is stolen, thieves would not be able to send money without the five-digit PIN. Users will also be able to disable the app if their phone is lost or stolen.

The Barclays Pingit system uses a smartphone app to permit person-to-person cash transfers of up to £300. Users who have an account with Barclays - and from March anyone with a UK bank account - can download the app, link it to their phone number, and then send cash to anybody who has linked their mobile number to their account. But the launch of Pingit could be the moment everything changes. The scheme has two features which make it stand out from previous initiatives and could appeal to a mass audience. For a start, you can see a real need being met - who hasn't been part of that scrabbling around for cash when you sort out a restaurant bill or try to pay a window cleaner? And then there is the fact that the technology - an app - is one with which anyone who has got a smartphone is now familiar. You don't need to go out and buy a new NFC handset, and then hope all your friends get one too. And at the heart of it is a powerful idea - that your mobile phone number can become the key to your bank account without you having to hand over your banking details to anyone who wants to pay you.

Pingit – now pinging money around from phone to phone: Want us to send you £300? Just give us your mobile phone number then. No, don’t, because we’ve got no intention of giving you £300. Ever. So forget we said it. But if we wanted to, we could do it. That’s because Barclays bank have unfurled a new app, called Pingit, that allows their current account holders to send and receive cash using only their mobile phones. You can use it to send cash up to the aforementioned sum of £300 to anyone as long as you have their mobile number.

How doth it worketh? Simpleth – users call the recipient’s mobile number via the Pingit app, key in an amount between £1 and £300, and hit send. The money is moved between the two current accounts using the Faster Payments service taking as little as 30 seconds. Barclays say that it will be useful in circumstances such as splitting a restaurant bill or paying for lapdances. Sorry, that should have been paying the window cleaner or other small tradesmen. Pingit is available for iPhone, Blackberry and Android-powered phones. Impressively, they say that although non-Barclays customers can only receive payments at the moment, they’ll shortly be able to send them as well, meaning that Pingit could become the standard app for this sort of thing.

UK Window Cleaner Beaten While Out Collecting Payments

Beaten man left ‘like a rag doll’ - A window cleaner was left lying in the street like a “rag doll” after being beaten unconscious while out collecting payments from his customers. Ryan Wilson punched John White and then kicked him on the ground during a confrontation at Cairo Street, Hendon, Sunderland. Newcastle Crown Court heard the 20-year-old attacker fled the scene, leaving his victim unconscious on the road but returned shortly after to rummage through his pockets.

The shocking attack was captured on CCTV and shows Mr White lying helpless while Wilson helps himself to his mobile phone. Mr White suffered three serious wounds to his forehead and face in the assault. He was taken to hospital for treatment after a passer-by saw him lying in the road and called an ambulance.

Prosecutor Jacqueline Wilkinson told the court: “The last thing he remembers is riding his bike along Cairo Street and the next thing he knew he was in Sunderland Royal Hospital. “He has no recollection in relation to the incident itself.” Wilson, of Percy Gladstone Street, Durham, admitted causing grievous bodily harm with intent and theft. Mr Recorder Wilby sentenced Wilson to three years behind bars.

The judge said: “He is like a rag doll when he goes through his pockets. The defendant is lucky he is only charged with GBH, he could have killed him. “It must have been an extremely frightening experience.” The court heard Wilson has a record of offending.

But the judge told him: “This is serious violence. This is in a different league to any other previous offences you have committed. “You came back and you rifled through his pockets as if he was a sort of rag doll and took his phone. “Despicable is the only word someone can use to describe something like that.”

The court heard Wilson had been out drinking with his mother that night and it was her who pulled him away and stopped the violence on Mr White. Jamie Adams, defending, said Wilson had a difficult childhood and was brought up in care. Mr Adams said the attack had started with a verbal altercation between the two men. He added: “He is disgusted with himself.”

UK Window Cleaners: Please take the time to read this..

Work-related violence case studies: This case study focuses on Bryan Dolby (pictured below), a self-employed window cleaner. Bryan works in the Grimsby area and carries out domestic and commercial work. He has a regular customer base. Generally, he collects payment from domestic customers by visiting their houses after completing the work.

This case study also includes information from members of the National Federation of Master Window and General Cleaners (NFMWGC) (special note - now called FWC), who are either self-employed or work in micro or small businesses. The Federation represents both window cleaners and general cleaners in the UK and has approximately 2500 members. Bryan Dolby is Chair of the NFMWGC.

Key risks
Grievances from customers: These include, for example, access problems to a customer’s house, ladder marks on a customer’s lawn and accidental scratching of windows and sills.

Customer attitude: some customers do not value the window cleaner’s work and have the attitude ‘You’re only a window cleaner’. Such customers are more likely to be aggressive or impolite.

Business rivalry: window cleaning is a competitive business and some cleaners try to undercut one another, especially the ‘cowboys’. This can lead to violence and abuse.

Collecting money: sometimes there are disputes over payment, or customers refuse to pay.

Location: the risk of violence or abuse is higher in some areas than others.

Aggressive customers: this can be caused by alcohol, drugs, having a ‘bad day’, shift workers who are woken up, etc.

Weather: working in bad weather sometimes puts the window cleaner in a bad mood, and therefore less likely to be polite and helpful to customers.

Animals: animals may panic or unnerve window cleaners, who may be attacked or bitten.

Personal characteristics: many window cleaners are young men who by their nature are prone to taking unnecessary risks.

Examples of incidents
A window cleaner had been doing a particular job for a while and had priced it at £10. Another cleaner, later discovered to be on the dole, quoted £8 for the job. They started to argue and fight.
A window cleaner’s van was smashed up while parked outside a job.
A lot of verbal abuse from customers is experienced.
A window cleaner was followed one evening while collecting money, causing him some anxiety.

Successful measures
Training and information
Competent workers: small business members of NFMWGC try to ensure, where possible, that only experienced and trained individuals are considered for working alone.

Key training messages:

• Be polite and helpful: always try to be polite with customers. Apologise if something goes wrong, and put it right straightaway, for example offer a free clean. This helps to defuse a situation and is probably the most successful measure.
• Walk away: leave an aggressive or potentially violent situation. If a customer will not pay, just accept it and terminate your service.
• Build a good reputation: this is worthwhile and will earn you respect and trust from within the community.
• A ‘resilient’ personality/attitude: window cleaners, especially if self-employed, need to deal calmly and tactfully with verbal abuse or customers refusing to pay, without letting the experience adversely affect the rest of their working day or week.

Work equipment - Mobile phones: window cleaners have phones for emergency use and to let friends or family know where they are. For example, Bryan calls his wife throughout the day to let her know where he is and when he expects to be back. If he works in premises where mobile phones are not allowed, he will call his wife before he starts and after he finishes. He also gives his wife the telephone number of the premises where he is working.

Buddy system: this is useful in small businesses. If two people are working on the same job in a large office building, they may still be working ‘alone’ at opposite ends of a building. Employees keep in regular contact with each other throughout the day. There is also a radio in the company van.

Double up: if asked to do a job in an area where you feel unsafe, take a colleague along. In Bryan’s experience, customers usually understand if you tell them why you need an extra pair of hands. If it is not possible to take a colleague, do not do the job.

Vary the routine: vary routes and times when collecting money and be aware of suspicious characters or behaviour.

Cheque payment: ask for payment by cheque, if possible, reducing the need to carry cash.

Good physical fitness: window cleaners are generally fit and active people. This helps if they need to get away quickly from potential trouble.

Less successful measures
Some measures are sometimes less effective than others, or have disadvantages:

Being polite to customers: there may be less motivation for a window cleaner who is not self-employed to be polite and helpful to customers, because it is not their business that suffers as a result of aggressive incidents.

Not arguing with customers: with the best will in the world, it is sometimes difficult not arguing with customers if they are in the wrong.

Avoiding involvement: Sometimes it is not easy to avoid violent incidents. For example, if a window cleaner witnesses an abusive incident in a neighbouring house, they may feel it is their duty to help or to defuse the situation, even if they are putting themselves at risk.

Training problems: self-employed window cleaners tend not to have any formal violence training. While some formal training might be useful (for example, dealing with difficult customers), there are practical barriers:

• Lack of existing formal training courses.
• Location: the industry is spread across the whole of the UK making it difficult to find one location which is suitable for everybody.
• Cost: every day off work is the loss of a day’s income for a self-employed cleaner.

The benefits and the costs

Bryan

• Very few violence problems are reported in the industry.
• Bryan has experienced few incidents of violence in his 19-year career.
• Bryan has run a successful business and maintained his livelihood for this time.
• Mobile phones are cost-effective, offering a safety and a business function, and are therefore assets to the business.
• Having a positive and sensible attitude does not cost anything.
• Accepting the loss of payment for the odd job can be ultimately cost-effective if it prevents an assault which leads to injury and time off work. Experience shows that many customers who complain and refuse to pay, sometimes relent when offered a free clean.

Bryan Dolby is Chairman for the Federation of Window Cleaners (FWC).