SMEs shoulder burden of late payments
by David Carter on 14 December 2009
Recent research by Bacs Payment Schemes Ltd shows that over a million British SMEs have been affected by late payments.
Although the actual average amount each business is owed has fallen from £38,000 in 2008 to £28,000 in 2009, the number of companies affected has risen dramatically by a staggering 65% since 2008.
The service sector is worst affected by late payments this year, with £16.6 billion of outstanding bills, compared with £9.5 billion late payments in the distribution sector and £4.5 billion in manufacturing.
Cashflow is the most common reason for overdue payments, with 30% of businesses surveyed citing this as the main excuse given. But 6% of late payers claim they forgot all about it, with the same number relying on the age old excuse “the cheque’s in the post”.
And the problem is only set to get bigger – 52% of SMEs agreed that if they’re paid late, they’ll pay their invoices later too, and that’s evidenced by a third of SMEs who report they are paying others later this year than in 2008.
This vicious circle will be placing many small and medium businesses under even greater pressure than they already face from the recession.
© Sheriffs High Court Enforcement Ltd. Please contact us to request permission to reproduce this article.
Disclaimer: The statements and opinions expressed in this article are those of the author and do not necessarily reflect those of Sheriffs High Court Enforcement Ltd, trading as The Sheriffs Office. Sheriffs High Court Enforcement Ltd does not take any responsibility for the views of the author. The author will not be held responsible for any comments posted by visitors to this site. Please note that this article does not constitute legal advice. The author has used his best endeavours to make this article as accurate and complete as possible, but requests that the reader be aware that the law of England and Wales frequently changes. The author strongly advises the reader to take legal advice before embarking on any enforcement action.
