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Rising amount of firms report late payment as a challenge

Monday 5th August, 2019

According to the latest Business Confidence Monitor (BCM) from ICAEW, late payments from its customers are a greater challenge than a year ago for one in five businesses (20%).

With Six out of nine sectors (Property, Business Services, Manufacturing & Engineering, Construction, Retail & Wholesale, and Banking, Finance & Insurance) are experiencing this as a growing issue, while nearly a quarter (24%) of SMEs are also reporting this. 

The index finds regulatory requirements and customer demand also continue to grow as rising problems, with around two fifths of businesses reporting these as increasing challenges.

Tim Gardiner, Finance Director at Panton McLeod Limited said:

“A large part of the problem is where companies have complicated processes for the submission of invoices or claims for payment, combined with a lack of clarity as to who the contracting company is in relation to large scale projects. This arises from intermediaries acting on behalf of utility companies in my experience.”

Michael Izza, ICAEW Chief Executive, said: “This feedback from our members, who advise businesses in every sector and level of the economy, reminds us that they face other challenges as well, many of which have little to do with Brexit – such as late payments and the regulatory burden. Robust Government action on these issues could make a real difference to the business environment, especially for SMEs, and would help to restore confidence and momentum. That would go some way to unlocking the economy and ensuring it is in the best shape to face the challenges and opportunities of life outside the European Union.”

The index suggests that the UK could see growth of only 0.1% in Q2 and 0.2% in Q3.