It suggests that more small firms have been chasing overdue payments in the last 18 months than the year before, when it recorded that 42% of invoices were paid late.
The report reveals the nationwide lockdown for the COVID-19 pandemic has also wreaked havoc with income for small businesses. The number of invoices submitted by small firms and freelancers fell by a third between April and June 2020.
This tallies with a report by McKinsey, which found that 80% of small business owners experienced declining revenues during the lockdown, with overdue payments of existing invoices threatening to disrupt business operations.
Daren Moore, Group Commerical Director at TaxAssist Accountants, said: “It’s especially important that payments are made on time as failure to do so remains one of the biggest challenges faced by small businesses and the self-employed, and it is disappointing that nothing has been done to address the issue.
“A number of these late payments stretch for weeks, with some invoices taking months to be paid.
“It is important to remember that the owners of small businesses struggle to make up any shortfalls resulting from late payments so need to be paid on time so they can keep on top of their cash flow.
“During these very challenging times, it is vital that small businesses are protected and supported, which is why we would like to see the Government take steps to introduce new legislation and significant penalties to put an end to late payment for good.”
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Last updated: 7th October 2020