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UK businesses want protection from late payments

A recent survey shows that SMEs have had enough of the late payment culture and that they want the government to step in to deal with this issue.

A recent survey carried out by the business finance provider Liberis found that UK firms were chasing £14.9bn in late payments. On average they spent

£5,000 a year trying to recover some of that cash.

A different survey published by YouGov and Basware revealed that 61% of SMEs wanted some sort of legislation to stop late payment. The survey was taken by 2,000 UK-based firms with fewer than 250 staff. Six out of ten of them backed the idea of minimum payment terms of 45 days.

One-in-four of those who filled out the survey said that the financial viability of their business had been put at risk because of late payment. Of the 2,658,985 SMEs in the UK, 665,000 have been put at risk of folding when clients have not paid in time.

About 350,000 business owners had used personal funds to take their firm through these periods of crisis. However, despite this 13% of staff had still been forced to let staff go.

However, despite all of the above, the survey carried out by Liberis showed that 40% of firms had no clear debt recovery process in place. This is despite the fact that many accountants from Bedington to Heswall and beyond offer invoice management as a service. Instead, up to 72% of SMEs are still spending around three days a month chasing payment. Time they could be using to build their businesses.

Posted by Peter
May 30, 2018
Finance

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