Late payments hit business

Late payments to businesses are causing a ‘ripple effect’ impacting on more than half UK businesses which could be costing them as much as £2 billion a year.

New research, conducted among 876 business leaders for Bibby Financial Services, shows that 2.38 million (53 per cent) UK business owners or managers are stalling payments to other parties in a bid to bridge the late payment gap. With 12 per cent of these businesses spending three days or more per month to recover payments, the potential cost to the economy is huge.

The figures highlight this ripple effect and the number of businesses that can be hit by the late payment chain. Indeed, for 1.35 million (30 per cent) UK businesses, just one late customer payment can have a large impact on payments to all subsequent suppliers. And, worryingly, for half a million (12 per cent) businesses one late payment can affect everyone they do business with.

Indeed, the research reveals 52 per cent of UK business owners are spending more time this year chasing late payments than last year, costing vital time and money at a crucial stage for the UK economy. This is supported by figures from Bacs released earlier this year which showed SMEs were owed £25.9 billion after late payments increased by 40 per cent on the previous year’s amount of £18.6 billion.

Source: EN the web