A new study suggests that small and medium-sized enterprises (SMEs) across the UK are spending an average of 130 hours a year chasing late payments, and losing billions of pounds worth of liquid cash flow as a result.
Siemens Financial Services, which commissioned the research, estimates that the time spent chasing outstanding invoices and overdue payments is costing small businesses £10.8bn every single year.
Its report adds that, when combined with the average value of unpaid invoices, this figure swells to around £250bn.
Businesses with an annual turnover of £1m or less are waiting an average of 72 days for invoices to be settled, in comparison with a waiting time of just 48 days for larger corporates, it said.
The findings come shortly after Labour Party leader Jeremy Corbyn publicly spoke out about late payments to SMEs, branding the growing problem a “national scandal”.
Citing his Party’s own research, he said that small businesses in London alone are currently owed a grand total of £5bn from larger companies.
The Labour leader accused large corporates of “borrowing interest-free from suppliers” and said that the late payments crisis was killing jobs and “holding back economic growth”.