Small Businesses Owed up to £1,800 in Monthly Late Payments
UK’s sole traders have had to chase a fifth of their monthly income, with 23% of business owners ‘giving up’ chasing payments
Small businesses and sole traders are owed between £208 and £1,846 a month in late payments – 18% of their monthly income – according to research by Paym.
This late payment “epidemic” is significantly impacting tradespeople’s cashflow and resources, with 23% of business owners admitting to just ‘giving up’ chasing a payment and 30% confessing that they have been forced to stop providing a service to a customer due to consistent late payments.
Despite 86% of small business customers stating that paying small firms on time is important, many delay payment as they don’t have the cash to hand – 44% reveal they have had to ‘make a dash’ to the cash machine, 28% have been forced to use old cheque books and 17% said they simply choose to pay late.
The research also found that business customer aged between 18 and 34 years-old are the worst offenders, with 56% admitting to not paying immediately due to a lack of cash; compared to just 33% of those aged over 55.
In terms of demand for sole traders, window cleaners were found to be the most popular trader used last year (28%), followed by plumbers (20%), heating engineers/gas fitters (19%); car washers (18%); electricians (15%); home improvement/builders (13%); mobile hair dressers (11%); gardener/landscapers (10%); beauticians (10%) and ‘odd job’ people (9%).
For more information on handling cashflow and late payments in your small business, check out Startups.co.uk’s advice here.