Addressing Rising Costs and Late Payments with AI in UK SMEs
Costs keep rising. Customers pay late. And the admin that comes with running your business takes up more of your time than it should.
Two recent statistics sum up the situation well. According to research by Sage, the average UK small business is owed £42,000 in overdue invoices. Meanwhile, government figures from May 2023 reveal that late payments alone cause the closure of 38 small and medium-sized enterprises (SMEs) every day, resulting in an £11 billion annual cost to the UK economy.
There’s no single fix for this, no magic bullet. But artificial intelligence (AI), which any SME can access and use, offers a powerful way to handle repetitive and time-consuming tasks—freeing up valuable time and mental space for strategic thinking and growth planning.
Where AI delivers value
The key to harnessing AI effectively is to start small. Instead of attempting to overhaul your entire business at once, focus on a clearly defined task that AI can streamline efficiently.
Financial administration is where AI often has the most immediate impact. Tasks such as chasing overdue invoices, reconciling bank statements, and processing payroll are prime candidates for automation. AI tools can flag potential issues, draft communications, highlight financial trends, and automate repetitive workflows, reducing errors and saving time.
However, the human element remains crucial. Your insights, experience, and judgment are indispensable complements to AI’s capabilities, ensuring decisions are sound and aligned with your business goals.
What using AI looks like in practice
Take Tyne Chease, an artisanal vegan cheese maker based in Tyne and Wear. Chasing invoices used to be a time-consuming chore that distracted from core business activities. After implementing Sage Copilot, the team now saves 12 to 14 hours weekly and sees payments arriving up to seven days faster. “If you took it away, there’d be piles of paper and me rocking in a corner,” says CEO and director Victoria Inskipp.
These efficiencies have enabled Tyne Chease to reduce costs and operate more effectively. A recent cost review allowed the company to lower retail prices by 30-50p, enhancing competitiveness. Additionally, the time saved played a significant role in passing a rigorous audit for a large-scale customer, according to general manager Adam Williams.
Similarly, London-based architectural joinery firm Haneker uses Sage Copilot to gain a real-time view of cash flow and receive alerts on unusual expenses. It has replaced spreadsheets and manual report generation, providing managing director Margaret Sadzynska with “a helpful assistant who knows the numbers better than I do and explains them in plain English.”
How to start using AI for your business
Adopting AI doesn’t require a costly or disruptive overhaul. A simple, step-by-step approach is often the most effective way to integrate AI into your business operations:
- Pick a task. Identify a recurring job that consumes too much time each week—such as chasing invoices or reconciling accounts.
- Set a benchmark. Define what “better” looks like in measurable terms, such as time saved, error reduction, or faster payment turnaround.
- Don’t go overboard. Limit yourself to one or two AI tools, often those already integrated into your existing software.
- Keep humans in the loop. AI is an aid that drafts, suggests, and flags, but final decisions rest with you. Your judgment and experience remain vital.
- After 30 days, review the results. Measure changes against your benchmark to retain what works and adjust what doesn’t.
Some may say AI is overrated, a view often rooted in trying to do too much too quickly. The AI revolution isn’t about adopting every new tool, but rather about choosing the right tools for the right tasks to reclaim your time.
Pick a task this month and see what changes. That’s the fastest way to discover how AI can save time, reduce costs, and support the growth of your business.
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