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Small firms owed nearly £23k in late payments

Monday 6th September, 2022

According to new research Intuit QuickBooks the ongoing issue of late payments among small businesses is persisting, hitting small businesses' cashflow at a time when the cost-of-living crisis is intensifying.

QuickBooks Late Payments Bulletin found that the average amount owed to small businesses with at least one overdue invoice has risen 6% year on year to £22.7k in May 2022, up from £21.4k the previous year – which is 65% of the average small business' typical monthly turnover.

Meanwhile the study found, almost two-thirds (65%) of invoices owed to small businesses were overdue within the month of May this year. In the same period last year this figure was 63%, as the cost-of-living crisis hits.

A recent study of QuickBooks customers found that for the first time since last year cash flow appeared to deteriorate in March 2022, with the number of small businesses reporting negative cash flow rising nine percentage points since January to 46%.

The decline in cash flow appears to stem from less 'money in' for these businesses, coupled with increased costs. Alongside fewer invoices being paid on time (dropping to just 45% in March, down from 57% in January), small businesses are also dealing with price increases from suppliers and for general running costs.

Yet despite these rising costs, small businesses report that their level of confidence remains stable and the same as January 2022, with 68% of small businesses saying they are confident in their financial stability.

Jolawn Victor, Vice President and UK Country Manager, Intuit QuickBooks, says: "Tighter profit margins and limited cashflow mean that the rising cost-of-living is even more of a burden for the smallest businesses. Now we're seeing that, as ever, it's these businesses who are impacted most by late payments.

"It is great to see that confidence among small businesses remains high despite the challenges being thrown at them. Their resilience is commendable, but it's important to know that there is support out there. Automating back office processes can reduce stress and help small business owners save valuable time, allowing them to focus on what is really important: running their business"

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