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UK’S LATE PAYMENTS CULTURE IMPACTING 4 IN 10 BUSINESSES

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UK’S LATE PAYMENTS CULTURE IMPACTING 4 IN 10 BUSINESSES

New report identifies liabilities associated with late payments culture spanning jobs, innovation and investment for medium-sized businesses

Concur, the world leader in employee spend management, has today released a major report examining the UK’s late payment culture, which is putting job creation at risk. The report, entitled Invoice Utopia, includes detailed YouGov polling of 1,233 British businesses and sheds new light on the consequences of poor invoice processes.

The report is published just days after Government announced its Made Smarter industrial strategy, which outlined proposals to create 175,000 new manufacturing jobs and add £455bn to the economy by embracing the Fourth Industrial Revolution.

The report highlighted the consequences of late invoice payments, with businesses being forced to take action to protect cash flows. Responding to the problem companies said they would have to take the following steps: making redundancies (7 per cent), stopping planned investments (17 per cent), being unable to pay salaries (15 per cent) and significantly reducing innovation spend (10 per cent).

A key finding of the report is that 40 per cent of British businesses said they have received a late payment in the last month, a trend which could undermine job creation.

Such a high volume of late payments is significantly worrying when 57,960 businesses each year – 23 per cent of the total number of business deaths – is currently caused by late payments.

The consequences of late payment culture were also exposed with 32 per cent of businesses saying they would feel a significant impact if their biggest customer did not pay an invoice for 90 days – a relatively common occurrence.

In devastating news for the UK’s thriving businesses community, the research discovered that 63 per cent of medium sized businesses (50-249 employees) receive late payments at least once every month, compared to 40 per cent of small businesses, dispelling the myth that smaller companies are often worst hit.

The polling revealed that 21 per cent of medium sized businesses said they would have to stop planned investment if their biggest customer failed to pay a substantial invoice for 90 days, 14 per cent saying that they would not be able to pay salaries and 15 per cent significantly reducing innovation spend. Most worryingly, compared to 6 per cent in small businesses and 7 per cent in large businesses, 11 per cent of medium sized companies said they would also be forced to make redundancies.

Emma Maslen, Senior Regional Director for Enterprise at Concur, explains this issue:

“As Britain builds its digital future, it’s shocking that so many medium-sized businesses are the most heavily affected by late payments. This underlines the very real risk this culture poses to the viability of some of the country’s leading employers.

“Although not cash-rich, small and micro businesses have the agility and flexibility to make strategic decisions when it comes to cash flow. And of course, enterprises more often than not have a ‘cash cushion’ available to bail them out in difficult situations. But for the mid-market, they have reached a position where they need to keep salaries and expenditure consistent, meaning they lack agility, but may be operating at a relatively slim margin in comparison to bigger players. This is crucial information about the oft-forgotten middle of our economy.”

Taking into account the business size of those deaths the report shows that approximately 353,000 jobs are being lost per year, or £549m through lost taxation capital. This figure does not include the average of 130 hours, or 16 working days, spent by the typical SME chasing late payments, meaning the overall impact of late payments could be substantially higher.

It’s no secret that late payments have long been an issue in British business – but indeed the scale of the problem has been thrown into sharp relief by the research. 73 per cent of the businesses researched were affected by late payments – 46 per cent in the last month. Once more, medium businesses, along with enterprise, were affected more than small business (63 per cent for medium businesses, compared to 49 per cent of large businesses and 40 per cent for small businesses in the last month).

In parallel, medium-sized businesses are also the worst in regards to paying late, highlighting their reliance on steady cash flow. 56 per cent of medium-sized businesses admitted to paying late at least once a year, in contrast to 47 per cent at enterprise level – traditionally seen as the worst at paying on time.

These statistics show why Concur, as an expert in the area of payments, is launching the Invoice Utopia campaign, with a view to improve the world of payments between UK businesses. With Brexit spreading further uncertainty, 86 per cent of respondents said they wanted to see the same amount (59 per cent) or greater protection (27 per cent) through legislation for businesses affected by late payments. Therefore, a proactive approach to tackle late payments will have an enormous impact on the UK economy as we move into uncharted waters.

A major component of this will be the continued enforcement of duty to report. However, with 78 per cent of SMEs unaware about these new requirements, the Government, especially the recently announced Small Business Commissioner Paul Uppal, clearly needs to convey this message.

Dafydd Llewellyn, MD of UK SMB at Concur, concludes: “This report sets out a vision for an invoice utopia where IT ensures that late payments are a thing of the past. This can only be realised if change is present in technology, business culture and an innovative approach to payments and invoices.

Businesses need to lobby harder when negotiating their original payment terms; large businesses need to realise the potential damage extortionate payment terms are bringing; government and regulators – in particular with the Small Business Commissioner and duty to report need to support all businesses; and technological tools that can give a clear picture of cash flow and payments should be utilised across the board. Only then will the burden be lifted from finance teams, businesses will have the room to grow and the UK economy will find itself in a powerful position to face the future.”

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Mercedes unveils electric compact SUV in bid to outdo Tesla

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Mercedes unveils electric compact SUV in bid to outdo Tesla 1

By Nick Carey

(Reuters) – Daimler AG’s Mercedes-Benz on Wednesday unveiled the EQA, a new electric compact SUV as part of plans to take on rival Tesla Inc and offer more emission-free vehicles to consumers to meet targets in Europe and China.

The EQA, the first of several electric models Mercedes-Benz plans to launch this year, will initially have a range of 426 kilometres (265 miles), with a 500km model coming later, the premium brand carmaker said in a video presentation.

The SUV will go on sale in Europe on Feb 4 at what board of management Britta Seeger described as “very attractive price points”.

Electric vehicle (EV) sales took off in Europe last year as carmakers scrambled to meet European Union CO2 emissions targets. Sales received a boost from subsidies included in economic stimulus measures rolled out in France and Germany, in particular.

Sales of fully electric and plug-in hybrid models rose 122% across the EU through the first three quarters of 2020.

Mercedes-Benz describes the EQA as an “urban entry model” and board member Seeger touted its “sustainability, versatility and fresh look”.

Electric carmaker Tesla got a head start on traditional carmakers with their vast investments in fossil-fuel vehicles and has dominated global sales. The mass-market Tesla Model 3 is the world’s best-selling EV, followed in distant second place by Renault’s Zoe.

As well as emissions targets, carmakers face bans on fossil-fuel vehicles that come into effect as early as 2030 in some markets.

(Reporting by Nick Carey; editing by Jason Neely)

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Wetherspoon shares higher after raising cash at top end of expectations

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Wetherspoon shares higher after raising cash at top end of expectations 2

(Reuters) – Britain’s Wetherspoon priced its sale of 93.7 million pounds ($127.92 million) worth of new shares at the top end of its expected range on Wednesday, a signal of confidence from investors that pushed the pub operator’s shares 3% higher in morning trade.

The cheap beer specialist said 8.4 million new shares had been placed at 1,120 pence per share – a discount of over 5% to Tuesday’s closing price, but the proceeds raised were at the top of the range it had given when announcing the offer a day earlier.

“We like Wetherspoon’s relentless consumer focus, employee engagement, largely freehold estate and history of evolution. This profile should allow JDW to fast return to its former profitability,” Jefferies analysts said.

Following strict COVID-19 led curbs in December, England went into its third national lockdown earlier this month.

The pandemic-hit hospitality industry has laid off thousands of workers, with Wetherspoon cutting jobs at its head office and airport pubs.

The company said on Tuesday it expects pubs to remain shut until March and that the fresh funds would provide enough liquidity to deal with very low sales after reopening.

It is also considering buying properties in central London, freehold reversions of pubs of where it is currently the tenant, and properties close to successful pubs in an effort to cash in on declining property prices.

“It has a young customer base who have been less fearful of venturing out when restrictions do ease, which does bode well for recovery unless there is another twist in the trajectory of the virus,” Hargreaves Lansdown analyst Susannah Streeter said.

Wetherspoon, which has seen no sales since shutting all its pubs from Dec. 31, had expected the placing to raise between 92.1 million pounds and 93.7 million pounds.

($1 = 0.7325 pounds)

(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Subhranshu Sahu and Shailesh Kuber)

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UK regulator slams waiting times, patient records at trans clinic

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UK regulator slams waiting times, patient records at trans clinic 3

By Rachel Savage

LONDON (Thomson Reuters Foundation) – England’s only youth gender identity clinic faced criticism on Wednesday from the country’s health regulator, which said patients “at risk of self-harm” were waiting too long to access specialist care.

A report by the Care Quality Commission rated the clinic run by London’s Tavistock & Portman NHS Foundation Trust as “inadequate” – the worst of four ratings – and said 26% of patients waited more than two years for their first appointment.

Two thirds of patients referred to a specialist at the Gender Identity Development Service had to wait for more than a year.

“Many of the young people waiting for or receiving a service were very vulnerable and at risk of self-harm,” the report said.

“The size of the waiting list meant that staff could not proactively monitor the risks to all patients waiting for their first appointment,” the report added, noting a sharp increase in referrals from 77 in 2009/10 to more than 2,700 in 2019/20.

The regulator’s criticism follows a high-profile court ruling last month that stopped doctors from being able to prescribe puberty-blocking drugs to under-16s without a judge’s approval.

Trans activists point to studies showing the drugs may help alleviate mental health issues trans young people suffer going through puberty in their birth sex, but others say the drugs have unknown long-term mental and physical effects.

The High Court ruling fueled a global debate about the age a child can transition gender.

The Tavistock, which was granted leave to appeal the judgment this week, said it took the Care Quality Commission’s report “very seriously”.

“(We) would like to say sorry to patients for the length of time they are waiting to be seen,” a spokesman for the Tavistock said in an emailed statement.

“We very much accept the need for improvements in our assessments, systems and processes … and will be agreeing a full action plan with the CQC to address further concerns.”

England’s National Health Service (NHS) said it had “previously recognised the need for a review of how to best meet the needs of children and young people with gender incongruence”.

It launched an independent review of the gender identity service in September.

Late last year, a transgender teenager took legal action against the NHS over the long wait to see a specialist at the Tavistock clinic. Under NHS rules, specialist care should be available within 18 weeks.

Besides the concern over waiting times, the Care Quality Commission criticised the clinic over the quality of its medical records.

“There was no clear rationale for clinical decision making,” it said.

(Reporting by Rachel Savage @rachelmsavage; Editing by Helen Popper. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

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