Survey: Corporates to blame for late payment
May 24 2011
A third of SMEs report that corporates are behind on payments
Large corporates are most responsible for the late payments making up the £24 billion owed to British small and medium sized enterprises (SMEs), research finds.
According to a study of 471 businesses by financial transaction processor Bacs, a third of small and medium-sized enterprises report that big businesses are behind late bill settlement.
Those operating in the manufacturing industry are most likely to suffer delay at the hands of the big corporates, where 41 per cent of the sector's SMEs experiencing late payment said large companies were to blame for overdue invoices.
The public and charity sector are meeting more of their bills on time – SMEs experiencing late payment on invoices to government and not-for-profit organisations almost halved from 11 per cent to 6 per cent in the last six months of 2010.
More than half (53 per cent) of the country’s SMEs have experienced late payment, up from 45 per cent in June 2010 - with the average owed at any one time standing at £27,000.
When companies do finally get paid, the length of time they’ve had to wait is an average of 39 days beyond agreed payment terms, an increase of nearly eight days since June 2009.
Businesses in the North are waiting an average of 52 days longer than anticipated.
Small businesses are being forced to spend an average of half a day every week pursuing payment, equating to more than 158 million man hours lost to the British economy just in chasing bill settlement.
Mike Hutchinson, head of marketing at Bacs says, ‘Late payment remains a big problem for British SMEs with billions overdue against bills, causing small businesses to use up millions of man hours in chasing invoice payment.’
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