NatWest: SMEs have £15bn in invoice arrears

Date: 15th April 2010

The UK late payment "mountain" is continuing to grow with £15.7 billion worth of invoices still outstanding after 120 days, new research has shown.

A recently-published report from banks NatWest and RBS has revealed that 71 per cent of smaller businesses have suffered from late payments in the last year.

According to the report, the collective amount of invoices that are settled after the agreed payment date is £62.87 billion.

Wholesalers seem to be the worse effected organisation, with 81 per cent saying they are forced to wait for payments, followed by construction firms (80 per cent), business services (72 per cent) and retailers (66 per cent).

Peter Ibbetson, chairman of small business at NatWest and RBS, said: "Bad debts and late payment of invoices are endemic problems for UK businesses.

"For more than one in ten firms, over 60 per cent of all their invoices are paid late, causing major cash flow problems for many. What's concerning is that so few are making use of services from their bank to help alleviate the problem."

A recent report from the Bacs Payment Schemes revealed that the waiting period for payment to be received has increased from 31.5 days to 41 days since June 2009.

Posted by Emma Clarke