Tuesday 10th January, 2017
According to Bacs Payment Schemes Limited (Bacs), almost half of the UK’s small to medium sized enterprises (SMEs) are being paid late.
The average late payment debt now stands at £32,185 which equates to a substantial £26.3 billion total across the 47 per cent of SMEs that say customers and clients stray beyond agreed payment terms.
Over three quarters of SMEs questioned (76 per cent) were prepared to go further and predict that when the UK finally leaves the EU, sometime after triggering Article 50, late payments would not get worse.
In the meantime, the effect of companies not being paid on time remains significant with just under a third (32 per cent) of SMEs impacted by late payments admitting they are forced to pay their own suppliers late. On top of that, 12 per cent of SMEs who experience late payments say it impacts on their ability to pay their own staff on time, while 20 per cent have difficulty paying business bills like energy, rates and rent.
And a third of those who experience late payments (33 per cent) say they are being kept waiting at least one month beyond their stated payment terms, with a quarter saying this can extend to over 60 days beyond agreed terms.