Wednesday 19th July, 2017
According to research by Bacs Payment Schemes Limited (Bacs) the UK’s smaller businesses are facing a total bill of £2.16 billion to chase overdue payments.
The overall late payment debt that UK small to medium size enterprises (SMEs) are owed amounts to £14.2 billion. Large as that sounds, the figures compares quite favourably with five years ago, when the total was double that at £30.2 billion.
Despite a drop in payment debt almost 640,000 SMEs, ie more than a third of the 1.7 million across the UK, say they have to wait beyond agreed terms for payments.
The research also found that of those facing late payments, 16 per cent struggle to pay their staff on time. Thirty nine per cent of companies are spending up to four hours a week chasing late payers, while 12 per cent of SMEs employ someone specifically to pursue outstanding invoices.
Bank overdrafts are also being used, a quarter of SMEs (25 per cent) rely on bank overdrafts to make essential payments.
Almost a third of companies face delays of at least a month beyond their terms and nearly 20 per cent are having to wait more than 60 days before being paid.