Late payments are a huge drain on SMEs

Small firms are owed a staggering £23.4 billion in late payments, an issue that is continuing to cause greater problems for businesses each year. In the last year alone, the figure has increased by £10.4 billion. According to one study, this is costing small businesses dear in both time and money, as 22 per cent of those waiting to be paid are spending £500 per month chasing payment and are using up millions of hours per year. The research also indicates that the number of firms in the UK experiencing overdue payments has hit 54 per cent among small to medium-sized enterprises (SMEs), the highest level since 2015. In addition, the average late payment debt has increased this year to £25,000 per firm, an increase from £17,000 in 2018, which is worrying as, on average, SMEs say that a debt burden of just £35,000 could jeopardise their business.