- 769,000 companies are affected by late payments
- 37% of SME’s cited that large company clients are the worst offenders for late payments
SME businesses uncertain the Government can help late payment issue
As previously reported, SMEs are more likely to accept late payment excuses from customers and clients than their larger competitors.
The total amount of money owed to small to medium sized companies is 28% more than it was just six months ago, with an incredible £24.6 billion now owed to businesses across Britain.
A recent study revealed that 769,000 companies are affected by late payments. The main culprits are large company clients, with 37% of SME’s citing them as the worst offenders. Sole traders and fellow SMEs were only found to be late payers in 17% of cases. Surprisingly, the Government was cited as being among the worst offenders for late payments.
The 2010 Budget pledged that the Government would pay 80% of invoices within five days rather than the usual 30. But, 6% of SME’s believe this to be an unrealistic challenge.
The research also revealed that, more than half of Britain’s SMEs are not expecting financial help from the Government to help tackle the payment issues.
To help tackle the issue of late payments, experts have urged SME businesses to move away from the use of cheques, ahead of their phase out in 2018, and adopt automated payment methods to improve cash flow.