Late payments still continuing for small businesses

[peterjhale]

Late payment threatening one in three small firms


One in three small businesses are experiencing problems with late payment, with the average firm owed £20,330 by tardy customers and clients, new research has revealed.

Worryingly, the study by BACS found that if the delay in payment is up to two months late, around 17 per cent of businesses, around 56,270 in total, go bust.

One in three small businesses are experiencing problems with late payment, with the average firm owed £20,330 by tardy customers and clients, new research has revealed.

Worryingly, the study by BACS found that if the delay in payment is up to two months late, around 17 per cent of businesses, around 56,270 in total, go bust.

In total, UK businesses are waiting for £11 billion in payment, putting many at risk of closure.

According to the survey, the main reason for late payment was the deliberate withholding of funds, a problem suffered by 88 per cent of small firms in debt.

One in ten small firms said they cannot pay their workforce if payment is a week late, while 38 per cent of businesses admitted they had trouble paying bills if they did not receive their money.

Despite the problems caused by late payment, 63 per cent of those polled admitted that they had failed to pay at least one invoice on time themselves.

Late payment has become a major obstacle for UK small businesses, with thousands going bust every year because customers and clients fail to pay up on time.

The practice has become worryingly accepted across the business community, with firms caught in a vicious circle of not paying invoices on time while not receiving money owed to them.

Mike Chambers, managing director of BACS, said that the findings were worrying.

“It’s worrying to see the extent of the problems that late payments are causing in this business sector.

“A single late payment can have serious implications not just for one business, but others further down the line,” he said.

[melaniejoy]

Yes, this is definately a problem. I had to change the way I do business.
I now require payment in advance. And, the good news is that I didn't see any drop in business because of this change.

[peterjhale]

Good one. Most of my business is via credit/ debit card or paypal.

For consultancy I ask for 50% upfront and I don't lose any business