As late payments continue to stunt the growth and expansion of UK small businesses, StonePay has developed a new app that is to hold late payers to account.
Two in five invoices in the UK are paid late, and it’s getting worse. Late payments have been an ongoing issue in B2B trade. With 25 million companies in Europe and 86 per cent of them counting less than 10 employees, a lack of cash flow can be disastrous.
Although late payments – and lack of capital as a result – are recognised to be one of the major causes of SMEs failure, especially after the recent shortage of lending to Britain’s small businesses, a permanent and effective solution is yet to be implemented.
However, StonePay believes that it might have a solution to this problem.
The UK start-up is in the process of launching a community-led app aimed at building a B2B community based on trust.
The app pushes a fresh approach whereby each company manages their r’eputation score’ based on the previous success of transactions; turning confirmed payment history into reputation points.
StonePay captures data from the two parties directly involved in the transaction and confirms the performance of either party. The app has stated that no third parties are involved in that process, as it allows bypassing extended communication chains which result in further delays.
Companies can build their reputation rating and their trust profile, which can be shared to guarantee a company’s trustworthiness, or to obtain better credit conditions and improved business terms, resulting in a smoother process and improved workflow of the finance department.
In this way, this new offering from StonePay arrives as a valuable tool for SMEs looking to maintain steady cash flow and steer clear of unreliable payers.
The pandemic has undoubtably weighed heavily on SME finances, with 80 per cent reporting declining revenues in the last two years, putting even more pressure on the importance of efficient cash flow.
StonePay is set to shift from an ‘external control approach’ to an ‘internal reputational approach’; placing trust at the core of each transaction.
In just two weeks StonePay reached 100 per cent of their crowd-funding target. A next round of funding is planned for December, followed by the official launch of the app.
“There is a huge need for B2B businesses across the globe to be able to trust each other and to control their business reputation without having to rely on traditional methods that cost money and cause delays in operations,” explains Filippo Mazzei, CEO and founder of StonePay.
“Our aim is to eradicate late payments, limit risk, and offer the good payers the benefits they deserve!”
