October 25 2016
A recent study has highlighted that the construction industry is getting worse, not better, at paying its sub-contractors. In 2014 the UK's 20 largest property developers took an average of 48 days to pay, now that’s risen to 56 days. This is in stark contrast to the average 39 days that they themselves get paid in. So, that means the major contracting companies are funding their business by borrowing money from the little guys…for free.
The report shows that many of these small contractors are putting their own businesses at risk for fear that chasing their main contractor for payment might jeopardize their chances of getting future work. With the government always pushing for more houses to be built, and that construction will be a key plank of us growing our way into a post-brexit future, then those plans may be built on fragile foundations.
Some small businesses have to borrow their way out of this problem and bridge the funding gap that late payment creates.
Martin Davies, Director at My Credit Controllers says that there is a better way:
"By using a professional credit control company, subcontractors can see the time to get paid come tumbling down. Your customer agreed upfront to paying you within a certain time, and that is what you should expect from them."
" Here at MCC, our calm and professional approach to managing the debtor’s payment process from outside, yields exactly that outcome. All without harming the business relationship between main and sub contractors."
" The surprisingly small cost of achieving this for our clients puts them in a much stronger and less vulnerable position when negotiating for the next stage of work, confident that they have the cash to plan and move ahead. When business is conducted without stress or acrimony, according to terms agreed ahead of time, it is a positive and profitable pursuit. Dare we say it, a pleasure to do business."
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