Late payments to small businesses rocket to 'all-time high'
Posted by Natalie Brandweiner in Finances on Wed, 02/11/2011 - 17:18
Small and medium-sized businesses are owed £33.6bn in late payments, according to figures from Bacs.
Half of all UK SMEs - 861,000 firms - are currently experiencing late payments and are waiting as long as two months to get paid, the organisation said.
Businesses are owed an average of £39,000 and the total amount due to all SMEs is the highest since the first payment survey in September 2007.
Mike Hutchinson, head of marketing at Bacs, said: "The issue of late payment is continuing to get worse for SMEs in the UK at a time when they need to be able to plan ahead for growth and ensure a strong cash flow, but instead they are hanging on for payments which could have a serious impact on their business if they are continually late.
"We urge SMEs to look at how many of the payments they are waiting for can be automated to help them assert more control over their cash flow, and hopefully alleviate some of that stress on the business and its owner."
Large companies were responsible for 48% of late payments to SMEs, followed by public/private companies, with internal processing cited as the most frequent excuse.
Despite regular criticism of public sector bodies for being slow to pay up, government and charities were named as the best payers.
An EU Directive to standardise payment terms to 30 days is expected to be introduced before March 2013.
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