Late payments threaten to derail the freelance industry

UK freelancers are increasingly struggling with late invoice payments, with around half admitting they have considered quitting life as a freelancer because of worries over continued late payment, and 46% stressing about having enough cash to live on.

Our latest research here at Ormsby Street, also reveals that one in ten freelancers have faced difficulties paying their mortgage or rent because of late invoice payment, and many have turned to family (37%) or even payday loans companies (36%) to cover a shortfall brought about by late payment.

While a fortunate 19% of respondents say most of their invoices are always paid on time, a freelancer’s invoices are paid on average 18 and a half days after their due date. At any one time, a freelancer in the UK is owed on average £5,431.03 in late payments and 79% of freelancers say that cash-flow is the number one concern for their business.

“Every freelancer knows that late invoice payment is one of the biggest frustrations, impacting cash-flow and causing much stress, from paying the mortgage to having enough money to live on,” said Martin Campbell, Managing Director, Ormsby Street. “For a freelancer to be owed more than £5,000 is clearly unacceptable and threatens the emerging freelance economy in the UK, which brings flexibility and work / life balance to so many.” 

The Office for National Statistics revealed in 2015 that 4.55 million Britons are now their own boss and research by the Association of Independent Professionals and the Self-Employed (IPSE) found three in five businesses agree that it would be difficult to operate without hiring freelancers. The Ormsby Street survey of 1,002 freelancers and sole-traders, revealed that 40% of respondents have taken out a County Court Judgement (CCJ) in the last year to chase a bad debt, and more than half say that late invoice payment is getting worse not better.

It remains a problem for many freelancers when it comes to chasing clients over late payment, partly because they do not have the time to spare, but also because of fears this might impact future work with that company.  57% of respondents say they worry that if they chase for payment that client might not use their services again, while two-thirds say they feel uncomfortable and awkward chasing clients for late payment.

“Why should a freelancer waste their own billable hours chasing payment for work that has been successfully completed and is already due for payment,” continued Martin Campbell. “If customers are not willing to pay within the agreed terms then it’s time for freelancers to become more informed over whom they work with, and either ask for payment upfront or even choose to not work with company.”

Special Freelancer rate!

With 49% of freelancers having had to turn down a contract because of concerns over a client’s ability / willingness to pay on time, we’re offering access to CreditHQ for the special freelancer rate of £12.50 for the standard subscription; allowing freelancers to obtain financial insight into every company they trade with. Sign up here to take advantage of this offer

“Freelancing has grown in popularity because of the choice and flexibility it gives people over their career, but its success relies on the prompt payment of invoices, which is not happening enough,” concluded Martin Campbell. “Credit-checking potential customers and partners is straightforward to do and should be done by a freelancer every time they work with someone, to protect themselves against late payment.”

About the research

An online survey of 1,003 freelancers and sole-traders was undertaken by TLF Research in March and April 2016.

CreditHQ, the credit-checking tool built by Ormsby Street, collates credit and trade information from Companies House, Experian and Dun & Bradstreet and presents that information in simple-to-understand credit and payment indicators, so a freelancer can assess which businesses are likely to pay them on time, or after 30 or more days.

Formed in 2014 to take over the operation of the financial data proposition of BCSG, Ormsby Street is developing the next generation of financial data services for small businesses. Its team of high-performing product innovators and software engineers are quietly taking sophisticated financial information and turning it into a next-generation digital tool to help businesses make good decisions about customers, suppliers and themselves.

CreditHQ now available in Germany

German small businesses now able to use award-winning credit-checking tool, CreditHQ

CreditHQ is now available in Germany, as part of a new partnership with one of Germany’s biggest banks.

CreditHQ allows a small business to check the financial health and credit status of any customer or partner and will be available to the small business customers of its German partner bank. Its German launch is the next stage of an ambitious international expansion programme that will look to target Poland, the US, Australia and other European markets over the next 12 months. 

More than 4 million German enterprises are classified as small and medium-sized enterprises, accounting for 99.6% of the total number of enterprises. German SMEs generated an annual turnover of approx. € 2,149 bn in 2012, which representing 35.3% of the total turnover of German enterprises.

“Despite new regulations brought in to combat late payment culture in July 2014, late payment remains a major issue for German small businesses, impacting on cash-flow and the ability to grow,” said Martin Campbell, MD, Ormsby Street. “There is a growing need in Germany for an easy way of checking the credit status and payment performance of customers and CreditHQ meets that requirement head-on. Partnering with a bank in Germany is a great way of bringing CreditHQ to the German market and we are confident it will mirror our success in the UK.”

CreditHQ is working with credit supplier, Burgel and will allow small businesses to check the credit status, payment performance and general financial health of millions of German small businesses. The simple traffic light ratings system shows clearly the level of risk associated with the company in question, and users are given two different ratings, one addressing credit risk and the other payment performance.

CreditHQ is used by more than 27,000 UK small businesses, and launched in Italy in 2015. Ormsby Street has just returned from the SXSW event in Austin, Texas, where it was representing UKTI as a UK Tech Ambassador and seeking new partnerships with US banks to further expansion into the US market.   

“Late payment is a problem for small businesses all over the world and the next 12 months will see us launch in at least another four countries,” continued Martin Campbell. “It is impossible to force someone to pay on time, so small businesses have to protect themselves against late payment as best they can. CreditHQ’s use of big data to address that problem gives small businesses the insight and power to do just that, and is suited to almost any territory in the world.”

About Ormsby Street

CreditHQ is built by Ormsby Street, a Software-as-a-Service business based in Old Street, London. Formed in 2014 to take over the operation of the financial data proposition of BCSG, Ormsby Street is developing the next generation of financial data services for small businesses. Its team of high-performing product innovators and software engineers are quietly taking sophisticated financial information and turning it into a next-generation digital tool to help businesses make good decisions about customers, suppliers and themselves.

Which football club’s finances need a kick-start?

Swansea and Southampton top premier league of invoice payment!

by Jane Hewitt

As this year’s football season reaches an end, here at CreditHQ we thought we’d take a look at how good the top football clubs are at performing where it matters – in the payments department!

Small businesses wait on average, 72 days for payment of invoices, and our analysis last year showed the average overdue invoice to a small business was worth a whopping £6,142. 

The Payment Premier League was compiled by combining figures for payment performance and credit risk.

“If a small business wins a contract with their local football team then it is easy to let the heart rule the head, and just go ahead with the work regardless – people love the idea of working for the team they support,” said Martin Campbell. “But our analysis shows that just because a team is good on the pitch, it doesn’t necessarily follow that they will be as strong when it comes to paying invoices on time.”

“Winning a major contract with any sizeable local company is a big deal for a small business, but few would think to run a credit check. Yet the average time for a small business to be paid is 72 days, a period of time which could be seriously problematic for a small business if the figures involved were big enough.”

Sunderland and Crystal Palace were the worst performers on our payment premier league, so if you’re thinking of doing business with either of these teams, follow these simple tips to ensure you’re taking the right precautions to ensure you stay on top of your business cash-flow:

• Stay on top of your invoice process to get invoices out on time.
• Follow up before the invoices are due.
• Chase invoices when due and always charge interest on overdue invoices (or issue a letter of intent).
• Review payment terms for this company, including payment up front if you are really worried about the impact of late payment.
• For major concerns about a customer’s financial health, don’t be afraid to walk away from a deal.

Check out who you’re doing business with at www.credithq.co.uk

Ormsby Street selected to present at Finovate Spring

We’re heading off to San Jose next week, as we’ve been selected to present CreditHQ at the prestigious Finovate Spring event in San Jose.

Finovate Spring is a demo-based conference for innovative startups and established companies in the fields of banking and financial technology. Held in San Jose, California, the event offers an insight-packed glimpse into the future of money via a fast-paced, intimate, and unique format.

FinovateSpring is a conference on steroids and a great opportunity to see new technologies and upcoming companies changing the world of financial technology.  Victor Smilgys, Keypoint CU

Competition is fierce to appear at this event, with around 70 companies from the financial technology sector showcasing new products or technology over the course of two days – both on stage and on their company stands to an audience of over 1500; including investors, VCs, entrepreneurs, expert analysts and influential press.

Our CEO and co-founder, Martin Campbell, will be presenting some great new features of CreditHQ, including our new bookkeeping integration. Of the integration, Martin said:

“When connected to Xero, CreditHQ, like a good financial controller, monitors every customer and every invoice the company has.  Unlike a financial controller, it has access to real-time credit scoring and payment performance information from multiple sources as well as insight into thousands of other small businesses using the product to chase invoices and recover debts.

Combining these data sources and feedback from tens of thousands of users using a patent-pending data-driven approach, the next generation Insight Engine is able to identify cash flow problems and credit risks for your business and highlight the most effective way to resolve them, and present a prioritized action plan to the business leader who can then simply approve the actions that the insight engine has planned.  

As well as highlighting actions for our own customers, our bank partners who provide the product to their SME customers, also gain insight to help them target the right products and support at small businesses customers they historically have very little data about.”

If you’re heading to Finovate, please come and say hi and let us show you how CreditHQ can help all small businesses combat the problem of late payments and focus on growth and success. For 20% off your ticket(s), use code: OrmsbyStreetCompFS16

An Egg-cellent offer this Easter week!

The long weekend might be over, but we’re extending our Easter special offer – Access CreditHQ FREE for one month!

Now we’ve hit the second quarter of the year, it’s a great chance to reflect on the first few months of the year and review the businesses with whom you’re trading.

Are your suppliers paying you on time? Might it be time to increase or reduce the amount of credit you’re extending to a particular business? Has your business’ credit and payment score improved and you’d like to show potential customers this?

CreditHQ can help improve your cash-flow and credit management, and ensure you’re working with the companies that are best for your business. If you know you want to work with a particular business but know in advance that they’re not likely to pay you until 45 days, you can plan accordingly and make sure you’ve got enough cash in the meantime for other purposes.

So this Easter, we’re offering you access to CreditHQ’s Standard subscription free of charge for one month! Simply enter the code EASTERHQ16 in the voucher code box*.

You’ll need to enter your card details, but don’t worry –  we won’t charge you a penny for 30 days (and if you find you’re not using CreditHQ, simply cancel anytime within the first month to avoid the £25 monthly subscription fee).

So hop to www.credithq.co.uk and start checking out the best businesses you should be working with!

*voucher code valid until 30 April.

Just ask! Your customers know what you need to do

I called a long standing customer of our of our software products the other day and the first thing he said was “Hi Rob, I’m amazed you called.  I haven’t ever heard from anyone in your business before.”

And it’s true, he hadn’t actually ever spoken to anyone in the organisation before.  He signed up to access our service via his bank, his access information was sent to him via email, and since then he’s been signing in to the service and using it himself in order to get the value he needs.  At no point in the 5 years+ that he has been a customer has he spoken to any person within our business.

We had a great conversation for an hour, where he told me all the good things about the service we offer, the areas that he hoped it would get better, and importantly he told me about the challenges he faces as being the Finance Director of a small to medium sized business.

All of this information is absolute gold for me in helping figure out how we can get better at making businesses get control of their money.

At one point in the conversation he said ‘would you mind if I email you when i have something I think you should know?’, to which I said ‘of course not’ and I proceeded to tell him how every customer who signs up toCreditHQ will get an email from me where I ask for them to give me some feedback.  

I give every customer the chance to email me with the answer to a specific question such as ‘tell me your biggest business challenge today’ or to complete a questionnaire that takes about 2 minutes to do. 

It’s amazing what you find out.  And it’s amazing how you can use this to make decisions in your business about what you can do next.  Sometimes it’s a little thing (we don’t care about feature X) but sometimes it’s a bigger thing (you should charge more than you do).

And all through just asking.

Many businesses are scared to ask their customers what they think because they worry that they think bad things about them.  But they’re your customers so you already do something they like or they wouldn’t have got that far.  Why not listen to them and get them to give you more of their custom, or get them to spread the word about how great you are because you listen. A colleague of mine who was recently at SXSW (where we were showcasing CreditHQ as part of the UKTI’s Tech Ambassador programme), was told by an Über driver that he much preferred driving for the competitor taxi firm over there, Lyft, purely because they get in touch with their drivers asking for feedback and how they can improve conditions for them. 

We can’t do everything we get told would help, but we might find out some things we can stop doing that frees us up to do more of the good stuff.

You never know! Just ask!

Ormsby Street to showcase CreditHQ at SXSW

We’re very excited to announce that we’ve been chosen as one of the  UKTI’s 33 Tech Ambassadors  (https://www.events.ukti.gov.uk/sxsw-2016-12/) to go to South by South West in Austin this week to showcase CreditHQ at SXSW Interactive (http://www.sxsw.com/interactive).

As we move closer to a US launch, this offers us a fantastic opportunity to spread the word about CreditHQ to a huge audience! Thanks again to the UKTI for this opportunity. 

We’ll be at the Great Britain House demoing CreditHQ on Saturday 12 March from 12pm onwards – come say hi! 

Location: Great Britain House @ Wanderlust Yoga Studio – 206 East 4th Street, Austin, TX 78701 

Taking ‘care’ to help entrepreneurs

In January, we wanted to make good on some new years resolutions and make a difference to entrepreneurs in developing countries.

For the whole of January, we “lent” our subscription revenue to Lend with Care to pass on as loans to entrepreneurs in less privileged countries.

Lend with Care is an innovative microfinance charity; pairing up entrepreneurs in developing countries with people in more fortunate parts of the world, who loan those entrepreneurs money in order for them to transform their lives through business.

To date over 25,000 lenders have made 251,510 loans and lent over £8m to 27,567 entrepreneurs in 11 countries providing 32,976 jobs – that’s a measurable difference!

It was a difficult decision to choose who to donate to on the Lendwithcare site, as we really wanted to choose them all. They all have great stories, and are looking to improve their businesses to help their families and are also trying to improve the environment they live in.

After much thought, we choose four different businesses to lend to:

Bui van Kien

Mr. Kien wants to diversify the sources of income and he chose to rear buffaloes because it is profitable in his region. He applied for a loan, which is to be used to buy a young buffalo.

 

Bui thi Ninh

Growing rice and rearing 2 buffalo help them to bring 120 USD per month on average.
Mrs. Ninh hopes to expand her breeding business by rearing one more buffalo.

 

Ra Siem

To increase their income and make it better Mrs. Ra wants a loan in order to purchase another small plot of land around 1,600 square meters to grow sugarcane.

 

Nguyen van Du

Mr. Du requested a loan to finance the installation of a household biogas plant. The biogas plants accepts mainly animal manure but also other organic waste. Then it converts them into biogas which is then piped into the home and used for cooking, lighting and even heating. This will help reduce electricity cost and save a lot of time spent travelling to collect firewood. Therefore, deforestation will be reduced and the living environment will be much healthier.

A few days later, we learnt that Nguyen van Du is now fully funded, so he’s on his way to realising his dreams for his business, which without Lendwithcare, he probably wouldn’t have been able to do. We’re looking forward to Bui van Kien, Bui thi Ninh and Ra Siem reaching their funding target too, so that they can get going with their projects.

Lendwithcare, is such a great idea, as it makes a real difference to entrepreneurs in developing countries, and it’s a ‘loan’, so you will get the loan amount back – so please lend any amount you can, to make a real difference today.

Here in the UK, we can help you to check the financial health of the businesses you’re trading with. For less than 50p a day, you’ll be able to see how good or bad a credit risk they are, and what’s most important to many small businesses – when they are likely to pay you. Sign up to CreditHQ so that you can get paid on time, and with that extra cash, please think about lending some to other entrepreneurs in developing countries, to help them improve their lives.

Thank you

Play our Business Match game this Valentine’s Day!

With Valentine’s Day just around the corner, do you know who’s your perfect match when it comes to running your business?

Could Paws for Thought be your perfect business match?

Check out our new Business Match game and sign up to CreditHQ this February for only £15 per month PLUS, we’re giving all new Standard subscribers a box of chocolates plus entering all new subscribers into a draw to win a meal for two at the fabulous Resident of Paradise Row in east London (or if you can’t make it to the big smoke, we’ll give you the equivalent in vouchers for a great national restaurant).

So head over to www.credithq.co.uk/businessmatch  to take advantage of this great offer and make sure you’ve found the perfect business to trade with. And good luck!

It’s events and awards season in the Fintech world…here’s what we’ve been up to!

September has been a very busy month so far here at Ormsby Street– we’ve just returned from New York’s Finovate Fall where Martin demoed CreditHQ to an audience of around 2000; ranging from directors of international banks to startup leaders in the Fintech world.

The next stop on our whistle-stop tour of Fintech events this month was Barcelona, where Ormsby Street was chosen from over 900 companies as a finalist in the BBVA Open Talent Finals. Here, we were able to talk to over one hundred attendees from BBVA bank, hear some fantastic keynotes about the future of banking, and meet the other sixteen companies who were lucky enough to be shortlisted. Unfortunately, we didn’t win this time (huge congratulations to both Everledger and Origin Markets who delivered great pitches and won) but we made some great connections and learned a lot about how Fintech’s innovations can work alongside traditional banking methods to improve banking practices for everyone.

We’re now gearing up for our next set of nominations as the award and event season marches on. We’re thrilled to have been shortlisted for The Growing Business Awards (Young Company of the Year), 2015 UKIT Industry Awards (UK Innovation and Entrepreneurship), The Credit Excellence Awards (Newcomer to the Industry) and the Great British Entrepreneur Awards. Hopefully we’ll be adding some more awards to the shelf here at Ormsby Street HQ. Wish us luck!