Small businesses are the driving force behind the UK economy. Yet, when comparing their situation with large corporates, it still feels like an unfair battle. Small businesses don’t enjoy the same benefits or have access to the same tools as large corporates. This is particularly true when it comes to accessing financial services or being paid on time.

The vast majority of small businesses are burdened by late customer payments and unpaid invoices. According to Siemens Financial Services, late payments caused small businesses in the UK to miss out on over £250 billion of liquid cash flow.

Figures also show that nearly 30% of business insolvencies in the UK in 2018 were caused by the late or non-payment of an invoice. That’s nearly 5,000 that no longer exist, simply because they didn’t get paid.

A survey from indicates that late payments or unpaid invoices don’t just do damage to the financial health of a company. They are also frequently cited as having a detrimental effect on business owners’ wellbeing: 52% attribute panic attacks, anxiety and depression to poor cash flow.

Yet, this plague could have been avoided. A solution already exists against the problem of unpaid invoices: credit insurance. By insuring their invoices, businesses are able to recoup what they’re owed even if the customer doesn’t pay or goes out of business.

Regrettably, in a report released by the ABI in February 2018, it was estimated that there are just 12,000 credit insurance policies in the entire UK, covering just a fraction of the 5 million businesses who could benefit, most of those policies being sold to large companies.

Why is credit insurance not embraced by those businesses who would need it the most – small businesses?

Historically, credit insurance providers and brokers have completely ignored the small business market in favour of large corporates for higher commissions. The result is a complete lack of awareness about credit insurance from most small businesses and an offering completely unsuited to their needs.

Credit insurance products are based on expensive ‘whole turnover’ policies, meaning all invoices are automatically — and unnecessarily — covered, and are sold via inaccessible channels such as brokers and offline.

Therefore there is a huge discrepancy with what a small business wants: a quick, convenient, online process that makes their lives as easy as possible.

In order to make financial services more accessible and transparent to small businesses, we have teamed up with Hokodo, who share the same ambition. We believe that small businesses have been at an unfair disadvantage for too long and are on a mission to change that.

Countingup is the business account that does your books, allowing entrepreneurs to focus on what they do best – running their business.

Hokodo was founded out of frustration with today’s financial services. Hokodo is a tech company that aims to make those financing and insurance products historically reserved for large corporates, available to the many small businesses left behind by today’s financial services industry.

For more information on how to insure your invoices, visit our Help Centre here.