Monday 12th March, 2018
Ahead of the Government’s Spring Statement, new research from the Federation of Small Businesses (FSB) reveals that Britain’s late payment crisis is worsening.
FSB surveyed 1,512 small businesses between 19th February and 5th March 2018 to compile the research.
The research found that the vast majority (84%) of small firms report being paid late, with a third (33%) saying at least one in four payments they’re owed arrives later than agreed.
A similar proportion (37%) state that agreed payment terms have lengthened in the past two years, hampering cash flow. Only four per cent say payment terms are improving.
FSB National Chairman Mike Cherry said: "Small firms will applaud healthy public finances off the back of responsible management. However, what they need to see day to day is large corporations taking a similarly responsible approach to paying suppliers. Small firms currently have billions withheld from them by large companies that pay late."
"Our late payment crisis causes the closure of an estimated 50,000 businesses a year, costing the economy £2.5 billion annually. The collapse of Carillion saw the dangers of poor payment practice writ large. The sorry episode has cost jobs and ruined lives."
"Improving the nation’s productivity forecasts starts by speaking out on late payments today. In doing so, the Chancellor will send a clear message to British boardrooms. The late payment crisis will only end when we see a fundamental cultural shift in the boardroom, with those at the top collectively addressing the issue, and directors held accountable for supply chain support."