Late payments stifling SMEs’ ability to grow

Small and medium-sized enterprises (SMEs) are struggling to pursue their growth plans, due to ongoing cash flow complications exacerbated by the UK’s worsening late payments culture.

According to a new study carried out by Barclaycard, more than two thirds of SME decision-makers believe that a lack of working capital is preventing them from expanding their business. Meanwhile, a further 27 per cent claim that cash flow problems are preventing them from being able to properly market their offerings to potential new customers.

Almost a third (32 per cent) of SME owners quizzed said that late payments were an ongoing problem for their business, while a further 11 per cent added that they had considered closing their business due to the severity of their ongoing struggles chasing unpaid invoices.

On average, SME decision makers quizzed as part of the survey said that they spend approximately half of a full working day every week chasing-up late payments and trying to plug gaps in their cash flow.

Marc Pettican, of Barclaycard, said: “Our research shows that working capital is a top priority for many SME decision-makers, with almost two thirds saying cash flow keeps them awake at night and a third indicating it has impaired their ability to grow.

“We encourage small businesses to explore how they can reduce the time and energy they spend on managing working capital problems.”

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http://blog.mackrell.com/late-payments-stifling-smes-ability-grow/
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Nigel is the Managing Partner and Head of Litigation and Dispute Resolution in the London office of Mackrell Turner Garrett.
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