The Herald

Late payments to firms becoming more frequent as cost-of-living crisis bites

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MORE and more Scottish firms are being paid late, a poll has found, as the cost-of-living crisis puts pressure on finances.

Some 24 per cent of companies north of the Border have seen the number of late payments they receive increase, according to Barclays, and nearly one-third of firms told the bank they have involved solicitors or taken legal action to get the money they are owed.

Liz Barclay, Small Business Commission­er, said it was “utterly distressin­g” that late payments were becoming more common.

“However, given the cost-of-living crisis, increases in material costs and staff wages, it isn’t surprising as many firms are delaying payments until they themselves are paid,” she said.

The Yougov poll found 60% of businesses would refuse a job with a potential customer if they were known for paying late.

Ms Barclay said: “The biggest companies with the deepest pockets must realise that if they delay payments or offer unfair extended payment terms the whole of their supply chain suffers.”

Nineteen per cent of small and medium enterprise­s said they were finding it more difficult to pay suppliers themselves because of the cost-of-living crisis, the survey found.

Late payments can impact on a business’s income, which can result in cash flow instabilit­y, and are the single biggest cause for business failure.

Some 6% of firms asked said the amount they are owed in late payments could be used to recruit more staff and 8% said they could expand their products or service offering. Business owners have also reported more than just a toll on their finances, the poll found.

One-third said they felt anxious or their wellbeing had suffered as a result of late payments.

Yougov pollsters asked 500 key figures in small and medium-sized enterprise­s with a turnover of less than £25 million. There were 56 polled in Scotland.

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