Many SMEs are still suffering from late customer payments
SMALL BUSINESSES continue to suffer from late payments from customers in large numbers, according to new research from Close Brothers Invoice Finance.
While the number of firms experiencing significant problems has fallen over the past three years, almost a quarter are still suffering at the hands of customers who do not pay their bills on time.
The latest quarterly Close Brothers Invoice Business Barometer shows that 24.2 per cent of SMEs now regard late payments as a problem for their business.
While that is down from 33.2 per cent in March 2015, it means one in four SMEs are still struggling to cope, despite a series of government initiatives designed to get on top of the problem. Close Brothers’ research also suggests that the size of the late payments issue is increasing for many SMEs.
The barometer found that 25.2 per cent of businesses suffering reported that they were owed more than £40,000, almost twice as many as the 13.2 per cent of SMEs suffering to this extent in March 2015.
David Thomson, CEO of Close Brothers Invoice Finance, said: “Our research suggests that despite a series of efforts to combat the matter led by government and other organisations, too many SMEs still aren’t being paid on time.
“This is an issue causing real hardship for many firms and has negative implications for the performance of the economy as a whole.”
The research also suggests that invoice finance continues to play a key role in helping SMEs unlock the value tied up in invoices issued to customers – but that more work needs to be done to prove the case for it.