SMES report ‘distressing’ rise in late payments
Almost a quarter of smaller Scottish firms have seen a jump in the number of late payments they receive – a problem that is the top cause of firms folding – since the cost of living increased, according to new research out today.
Barclays said its new findings indicate that rising prices have started to affect payments between businesses, as 19 per cent of small or medium-sized enterprises (SMES) said they’re finding it more difficult to pay suppliers as outgoings increase.
The report also found that 6 per cent said the amount they are owed in late payments could be used to recruit more and 8 per cent said they could expand their products or service offering.
Furthermore, a third of respondents said they have felt anxious or their wellbeing has suffered as a result of late payments and 17 per cent said they have had sleepless nights.
However, firms are not tolerating the issue – six in ten say they would refuse a job with a potential customer if they were known for paying late, and about a third of businesses report having involved solicitors to reclaim late payments.
Companies can claim interest and compensation if a payment deadline is missed, but Barclays found that while 60 per cent of firms in Scotland surveyed know they can take action, only 13 per cent had done so.
Small Business Commissioner Liz Barclay said late payments becoming more frequent is “utterly distressing” but not surprising.
“The biggest companies must realise that if they delay payments or offer unfair extended payment termsthewholeoftheirsupply chain suffers.”