A new study suggests that UK small and medium-sized enterprises (SMEs) are still chasing billions of pounds worth of late payments, despite recent efforts to crack down on the problem.
Following a series of delays, the Government famously appointed a Small Business Commissioner earlier this year to act as a ‘Government-backed ombudsmen’ that would help to tackle Britain’s late payment woes.
At the time, research found that only one in five SMEs believed that the appointment of the new Commissioner would have a positive impact on their business.
A few months on, it appears that these sceptical SMEs were right – as separate research has revealed that small firms are still chasing some £14.9 billion in late payments.
According to a report published by financial services firm Liberis, almost three quarters (72 per cent) of SME bosses are still spending an average of three days per month chasing unpaid invoices.
More than half (58 per cent) of SMEs are still owed up to £10,000, while more than a quarter (27 per cent) are owed £20,000 or more, the report reveals.
The escalating problem has had a negative impact on many firms’ finances, with 50 per cent of respondents admitting that ‘aged debt’ has prevented them from investing in growing their business and many more concerned about the long-term impact on their cash flow.
Elsewhere, organisations such as the Federation of Small Businesses (FSB) have voiced concerns that “supply chain bullying” remains a problem and that struggling small firms need much more support.