A survey of more than 500 managers at companies ranging from two to 250 employees has found that the late payment culture is putting the future at risk for more than half of all UK SMEs.
11 per cent of UK SMEs are curently owed more than £100,000, with the average sum being owed totalling nearly £64,000.
Interational data provider and researcher Dun & Bradstreet shows that late payments are leading to cashflow difficulties for 35 pct and to reduced profit performance for 24 pct.
The research reveals that 51 pct of UK SME respondents claim late payments are more of a problem than they were three years ago, with 58 pct saying late payments are putting the business at risk of failure. Just over half (51 pct) of SME owners confess to using personal savings to cover the shortfall from late payments. More than one third (36 pct) of SMEs even admit to not credit checking their customers.
Manufacturing was found to be the sector most exposed to late payments, with SMEs in that sector being owed an average of £83,000.
Perhaps most worryingly, businesses admit that being paid late is leading them to perpetuate the cultural problem, with 29 pct admitting that they themselves are delaying payments to other suppliers - a number which we might suppose to be an understatement of the true scale of the problem.
HTB launches Specialist Business Finance - 10/01/2019
Ignition makes Top 20 - 08/11/2018
SMEs seek solutions for work stress - 10/10/2018