More than three in five small businesses are dealing with late payment issues, according to research from YouGov and Hitachi Capital Business Finance.
A sample of 1,201 business decision makers were asked to report on the invoices they had sent customers and suppliers that were due for payment at the start of June 2018.
The survey found only three in ten small businesses (30 percent) said all their invoices had been paid on time.
Some 63 percent were dealing with late payment, while 48 percent of respondents reported having invoices paid a week late. Around 46 percent had invoices paid a month late and 35 percent said they were having to wait for more than a month to have some invoices settled in full.
It was also found that the smallest businesses – those with an annual turnover or less than £1m – were most at risk of serious non-payment.
They were most likely to have invoices paid more than a month late (26 percent) and most likely to have bad debt risks from non-payment (25 percent). In total, 20 percent of the UK’s smallest businesses said they were living with non-payment for 20 percent of their invoices.
Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance, said: “At a critical moment in the economic cycle we need to ensure that small businesses continue to be the engine room to our country’s growth and prosperity. Late payment directly threatens this.
“We estimate there is around £50bn of cash locked up in late payments and this disproportionately affects the small business community, not to mention the valuable time and resources small business divert from the production line to needlessly chasing late payments. It’s time for change and we fully support policy changes that protect the welfare and economic growth of small businesses – and by implication – the country at large.”