UK small businesses owed £16.9bn in late payments
12th June 2015 | News
New research has found that UK small businesses are owed nearly £17bn in outstanding payments, which is “stifling the growth” of the businesses underpinning the nation’s economic recovery.
The report by Intuit Quickbooks, which surveyed 250 micro business owners – companies with one to 10 employees – found that a reluctance from bigger businesses to pay promptly is having a “major impact” on cash flow.
Almost a third (32 per cent) of micro business owners have been forced to take out loans or credit to pay suppliers and wages.
Late payments have also impacted on their productivity too with micro business owners having to spend an average of almost four weeks (19 working days) chasing outstanding invoices each year.
Many micro firms still issue invoices in the traditional paper format, with only 36 per cent of respondents issuing e-invoices via e-mail.
As micro businesses are said to account for 96 per cent of all UK firms, Rich Preece, managing director, Intuit, fears the continuing late payments cultures is “stopping entrepreneurs focusing on what really matters”.
“When you’re putting out fires and jumping over hurdles on a daily basis, you don’t need the distraction of worrying about whether you’ve been paid in a timely manner for your products or services, so it’s disheartening to see the extent of the issue,” added Preece.
“This isn’t just about late payments, it’s about expecting and facilitating payments much more quickly, and the impact this can have on the millions of very small firms across the UK.
“There’s major potential to dramatically improve micro businesses’ cash flow and save valuable time by making it easier for their customers to pay – particularly when the vast majority are more than happy to settle up immediately themselves when dealing with small businesses.”