Member Article

Small businesses losing out through late payments

Small businesses in the UK are owed £18.6bn in outstanding payments, new research has found - a jump of £2.6bn in the last year. The study, by automated transactions company Bacs, found the average amount owed to small businesses now stands at £30,000.

This figure doesn’t bode well for the third of respondents who said they could go out of business if they are faced with overdue payments of more than £20,000. However, despite the jump in the amount owed, the percentage of businesses having to deal with late payments has fallen to 51%, compared with 59% in 2006.

Regionally, businesses in Greater London are having the most difficulties, with 65% owed money, compared to just 45% in the North West.

The survey also found that on average, businesses spend 17 working days a year chasing up payments, with almost a fifth of respondents saying they employ someone specifically for that task.

Michael Chambers, managing director of Bacs, said: “The most striking thing about the figures is that the scale of late payments has grown in value yet again, despite companies investing a significant amount of time and money to secure the demise of the problem,” he said. “Making the decision to employ someone to chase in late payments is a big step - and it can be effective, but it can also be time consuming and repetitive month-on-month if the right tactics aren’t employed from the start.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .