Small firms are owed a staggering £23.4 billion in late payments, an issue that is continuing to cause greater problems for businesses each year. In the last year alone, the figure has increased by £10.4 billion.
According to one study, this is costing small businesses dear in both time and money, as 22 per cent of those waiting to be paid are spending £500 per month chasing payment and are using up millions of hours per year.
The research also indicates that the number of firms in the UK experiencing overdue payments has hit 54 per cent among small to medium-sized enterprises (SMEs), the highest level since 2015.
In addition, the average late payment debt has increased this year to £25,000 per firm, an increase from £17,000 in 2018, which is worrying as, on average, SMEs say that a debt burden of just £35,000 could jeopardise their business.
Numerous studies suggest that more than half the small firms affected chase payment in their own time, which eats into their personal life and jeopardises their business, with 63 per cent of those impacted saying that bad debt has a negative effect on their business.
Different business owners appear to have different methods of coping with the burden of bad debt, with more than a third saying they have to rely on bank overdrafts, while almost a quarter revealed that being paid late forces them to hold back on settling their own business debts or even paying their staff on time.
If your business is experiencing late payment issues, contact our expert team today.