Late Payment Problems Worsen for UK’s Small Businesses
More than half of small and medium enterprises wait over 30 days for their invoices to be paid
Bibby Financial Services’ ‘Small and Medium Enterprise Confidence Tracker’ has reported a 9% rise in late payments from Q2 2014 to Q2 2015, with 51% of business owners reporting they wait over 30 days to get paid.
Small and medium businesses located in the West Midlands, Yorkshire and Humberside were the worst affected last year, however the number of firms suffering from late payments in the North East has also doubled.
Construction businesses were the most affected in terms of sector, followed closely by manufacturing and wholesale firms. 55% of small and medium constructions businesses said they currently wait over 30 days for invoices to be paid – up 11% from Q2 2014.
The news comes despite attempts by the government to tackle late payments. The new government introduced a Small Business Conciliation Service and small business minister Anna Soubry announced proposals for the appointment of a small business commissioner last month to help with such issues.
David Postings, Bibby’s UK chief executive, said:
“All too often small and medium enterprises are faced with the choice of accepting crippling payment terms or losing out on business.
“In April we will see new legislation naming and shaming businesses with the worst records. While we will have to wait and see the effect of this, more can be done now. There needs to be a change of culture, where larger businesses treat small businesses fairly and view them as an extension of their own business.”