Government Policies Still Leaving Business Owners Waiting To Be Paid
It’s been revealed that 30% of all small business payments are now late, compared to just 28% in 2011
Five years’ worth of government policies have done nothing to help tackle the issues of late payments, according to The Federation of Small Businesses (FSB).
Their report, Time to Act: The economic impact of poor payment practice, revealed that 30% of all small business payments are now late – compared to just 28% in 2011.
37% of all enterprises have run into cashflow difficulties at one stage in their life time, with 30% forced to use an overdraft – while 20% admit not receiving money owed on time has affected their profits.
More worryingly for business owners, late payments can almost act as a death knell.
It’s estimated 50,000 ‘business deaths’ could have been avoided in 2014, if payments had been made on time and as promised – adding an extra £2.5bn to the UK economy.
Mike Cherry, national chairman at the FSB, said:
“Uniquely, the UK now risks having a business culture where it is acceptable not to pay small businesses on time. Based on an imbalance of power between large companies and their small suppliers, this now has a chilling effect right across the economy. It’s distressing to hear from our members that in 2016 the average value of each late payment now stands at £6,142.
“Small businesses have to run a tight ship with their cash flow, and as they struggle with increasing business costs on one hand and an uncertain domestic economy on the other. They should not also have to struggle with the stress, time and money required to chase overdue payments from corporate giants.”
Is your business struggling because of late payments? Read this guide and take what you’re owed.