It doesn’t matter if you’re sitting behind a lemonade stand on the side of the road or the desk of a swanky Manhattan office, all businesses boil down to one fundamental concept: cash flow. No matter what line of work you may be in, the ultimate goal is to make sure you bring in more money than you send out. Of course, roughly half of that battle is billing, so here we’re going to take a look at 10 surprising statistics about billing.
1: 67% of SMEs on the island of Ireland have had issues with late payments
According to the Close Brothers Business Barometer, which surveys over 900 SME owners and senior managers across the UK and Ireland, over 67% of SMEs on the island of Ireland have had issues with late payments, with almost half being forced to lay staff off as a result.
2: Those affected by late payments were forced to write off up to 10% of their turnover
The same study found that over half of those affected by late payments were forced to write off up to 10% of their turnover in the preceding year, with some being forced to write off as much as 25%.
3: 40% of businesses say they don’t have the time to follow up on unpaid resources
According to research conducted by financial services firm Bacs, which handles Direct Debit payments in the UK, late payments aren’t just an issue of the money coming in eventually. The cost of chasing unpaid invoices in the UK adds up to over £2 billion, with 39% of businesses spending 4 hours a week or more chasing payments, 12% hiring a person specifically for that purpose, and 40% saying they don’t have the time or resources to follow up at all.
4: 53% of managers approve of the use of freelancers for short-term work
Another study by Close Brothers found that, despite some criticisms, there is continued interest in the gig economy, or the use of freelancers for short-term work. 53% of managers approve of this type of working relationship, with 28% saying it was due to the flexibility it allows, and 25% saying it was a more cost-effective solution.
5: 1-In-3 Businesses wait more than a month past due dates to receive payment
While most businesses will allow for a grace period when it comes to late payments, almost one in three wait more than a month past due dates to receive payment, with a further 20% being required to wait at least 60 days past their terms and conditions
6: 90% of 4 million invoices that go through the public sector annually are on paper
In response to a 2014 EU directive that stated “Member States shall ensure that contracting authorities and contracting entities receive and process electronic invoices which comply with the European standard on electronic invoicing”, the public sector in Ireland is set to handle 90% of its invoices electronically. Currently, 90% of the roughly 4 million invoices that go through the public sector annually are on paper.
7: Over €4.4 million stolen from Irish businesses this year in Ireland
There has been a dramatic rise in a form of invoice fraud this year in Ireland, with over €4.4 million being stolen from Irish businesses. This was done by scammers who contacted Irish businesses impersonating their business partners, claiming to have updated bank details for future payments. When the next payment is made, it goes into the fraudulent account, which may not be noticed by the intended recipient for some time. Perhaps the most worrying aspect of this is the scale of the theft, as the €4.4 million was stolen with just 132 fake invoices.
8: 25% of Ireland’s national income goes to just 10% of the population
At the end of 2018, there were roughly 137,200 employees earning minimum wage in Ireland, or about 7.6% of the workforce. Additionally, about 24,500 people, or 1.4% of the workforce, earned less than minimum wage at that time. On the flipside, 25% of Ireland’s national income goes to just 10% of the population.
9: It takes one full-time employee to manage the payroll of about 250 employees
According to a 2009 study by the Willis Company, it takes one full-time employee to manage the payroll of about 250 employees. In Ireland, the cost of managing payroll is about €60 a year per employee, if they are paid monthly, and about €156 a year if they are paid weekly.
10: 86% of SMEs across the UK and Ireland are not availing of any sort of billing services
Despite the complexity and time-consuming nature of managing a billing department, the Close Brothers Business Barometer found that 86% of SMEs across the UK and Ireland are not availing of any sort of billing services.
Some of these facts, such as the problems with late payments, may seem all-too familiar to you. Others, such as the entry on paperless invoices, might just be an interesting tidbit of trivia. Ultimately, billing will always be an incredibly important aspect of any business, so whether you found these facts surprising and interesting, or obvious and dull, the more you know, the less likely you are to encounter any issues.