Study reveals a mere 52 per cent of invoices sent in 2017 were paid on time or within three days of the deadline.
The research also found that 26 per cent of micro-businesses have had to wait three to six months for payment, and 10 per cent have had a client who has never paid them at all.
While late payments are an issue across the UK economy as a whole, the research reveals just how widespread it is amongst SMEs.
Ed Molyneux, CEO and co-founder of FreeAgent, the business behind the research, says: “Around half of the invoices sent by micro-businesses in the UK get paid late, and there are certain areas where the issue is considerably even worse. Even in Manchester, where late payment is least prevalent, there are still many businesses who aren’t being paid on time. Some of these late payments go way beyond a week or two, with some taking months to settle invoices, or even not paying at all.”
The UK’s late payment culture has left many small businesses suffering with severe cash flow problems. Overall, £26bn is owed to UK small businesses and 50,000 are forced out of business each year as a result.
With this in mind, it is essential that SME business owners receive the specialist support and guidance they need to make effective decisions both now and for the future, as well as access to the right financial products suited to their specific business needs.
Our SME business experts at Beavis Morgan are available to structure your business with cashflow and profit forecasting to measure performance and maximise opportunities. We work to a pre-determined plan, to help you avoid any nasty surprises.
Through our partner businesses, BM Structured Finance and BM Advisory, we are also able to help with sourcing and restructuring debt finance for SME businesses, as well as assisting with resolving issues which can impact on business performance and success, and finding innovative solutions for businesses and individuals in distress.
If you would like to discuss ways of improving the free cashflow in your business, please contact Steve Govey or your usual Beavis Morgan Partner.