Small and medium-sized businesses in the UK already struggling to cope with the effects of the economic downturn are owed more than £10billion on any given day due to suppliers or customers failing to pay on time, according to Barclays Local Business’ annual Late Payments report.
The report reveals that on a typical day small businesses across England and Wales are £2,440 out of pocket as a result of suppliers or customers failing to pay during the standard 30-day invoicing period. This total figure is up £1.7billion on last year and has resulted in SMEs losing nearly £5billion over the past 12 months due to non-payments - an average of £1,133 per business.
Says John Davis, marketing director for Barclays Local Business: “Despite some recent positive economic signs, it’s concerning that late payments are on the rise. This is a serious issue for the businesses we talked to - around a third say it threatens their day-to-day survival.”
Businesses in London and the North West are most likely to be impacted by late payments, while SMEs in the North West are owed an above average sum of £2,858 on any given day. Payment delays were slightly less prevalent in the East of England, where 57 per cent of SMEs have been affected by suppliers or customers failing to pay on time. SMEs in the North West and London spent the longest chasing late payments - around 1.65 hours per day. This figure drops to just over an hour in Wales and the East Midlands.