SMEs face 'squeezing' from both ends
Nov 22 2007
Increasingly tight payment schedules are financially 'squeezing the smaller firms from both ends,' according to the Federation of Small Businesses (FSB).
SMEs often have to wait lengthy periods of time for payment from larger businesses which know they can take liberties with smaller firms engaged in contracts with them, states the FSB.
It says the average waiting time for payment has now 'flat-lined' at 46 days and is not improving.
The FSB says: 'Frankly we don't think that's good enough, we think that anything over 30 days is really unacceptable.'
Simultaneously, larger firms that supply SMEs are increasing pressure on them. Some have reduced payment terms by demanding monies sooner and chasing up returns with threatening letters, the federation states.
Recent research has also shown that the biggest concern for SMEs is late payment by customers.
Findings by the Asset Based Finance Association have shown that around 44 per cent of companies have been asked for extended credit by customers in the last six months.
The FSB is a group which campaigns to protect the business interests of SMEs and the self-employed.
SMEs often have to wait lengthy periods of time for payment from larger businesses which know they can take liberties with smaller firms engaged in contracts with them, states the FSB.
It says the average waiting time for payment has now 'flat-lined' at 46 days and is not improving.
The FSB says: 'Frankly we don't think that's good enough, we think that anything over 30 days is really unacceptable.'
Simultaneously, larger firms that supply SMEs are increasing pressure on them. Some have reduced payment terms by demanding monies sooner and chasing up returns with threatening letters, the federation states.
Recent research has also shown that the biggest concern for SMEs is late payment by customers.
Findings by the Asset Based Finance Association have shown that around 44 per cent of companies have been asked for extended credit by customers in the last six months.
The FSB is a group which campaigns to protect the business interests of SMEs and the self-employed.