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Who pays you late?

Want to know whether your new client has a track record of paying you late? Steven Renwick has created Satago, a new database of late paying clients for freelancers and small businesses. He tells us more below.

If you’re working as a freelancer in the UK you don’t need to be told that late-payment of invoices is a problem in this country – you almost certainly know from personal experience. Nevertheless, some of the data is quite staggering, with BACs recently finding that SMEs were being paid on average 43 days beyond agreed terms. For freelancers the problem can be just as bad.

What’s not so clear, is how to deal with the problem. The government has tried to help through legislation, but it’s not considered very effective so far. For some reason in this country it’s almost become accepted as the norm to pay your suppliers as late as possible.

Part of the problem is a lack of information. Business credit reports are ok for telling you if  a prospective client can pay you, but they’re not so good at telling you when they’re likely to pay you. A company can have a perfectly good credit rating, but still pay all its small suppliers chronically late. By the time you find out a company is a bad-payer, it’s already too late.

bookeepingThe thing is, the information is all out there. Who knows who pays late? The other poor people that have already gone through the pain of chasing said company for payment. So why not liberate that information and use it to bring transparency to companies’ payment behaviour? That way you could find out before dealing with a new customer when they are likely to pay you, and the added transparency would hopefully put some healthy peer pressure on companies to pay their suppliers a bit faster.

That’s why I built Satago – a place where freelancers and small business owners can anonymously share information, direct from their accounting software, about when their business customers pay them versus agreed terms. It’s not really a new idea – credit circles, where companies would secretly share information about who was paying late, have existed within industry sectors for years – and I know that some industry bodies still send round pdfs and excel lists of known late payers. However it’s not exactly efficient, and it’s not very helpful to the freelance graphic designer if the builders are sharing with each other that a new hotel is a bad payer.

I made Satago with the model that if you put data into the system, you get data out for free. However, I really hope the intrinsic motivation for people to input data will be a realisation that if we all share this information, it could make a real difference and improve life for all of us. We already complain about late-payers to our nearest and dearest (and anyone else that will listen!), so why use that energy constructively and forewarn our peers as well?

My vision is that by bringing transparency to when companies pay their suppliers, Satago can effect a real change in the mindset of UK companies to pay on time. It won’t happen overnight, but what’s obvious is that it needs support from everyone to get behind this and make sharing information the norm – whether you’re paid late, or on time.

Satago is currently in private-beta and looking for more willing testers before we launch. To sign-up to help test the system, or to find out when it’s live, register your interest here: https://www.satago.co.uk/submit or email steven@satago.co.uk

 

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