Late payment crisis: three in five businesses owed money

58% of 500 SMEs across the UK are currently waiting on late payments from their customers, according to research by Barclays.

For medium sized businesses with between 50 to 249 staff, this figure is more than nine in ten (94%).

What is the impact of late payments?

Awaiting payments from customers has a negative impact on the businesses income causing cash flow instability. Dependant on individual businesses, missing owed money may prevent investments and recruitment opportunities, or in the worst case being forced to closed.

Late payment culture is not a new challenge. This has been an issue for many since before Covid19, but two in five (40 percent) of SMEs say its more likely due to the pandemic.

Aside from the business itself, late payments can also effect the mental health of the owner. Two fifths of business owners say that their mental health has suffered as a result of the crisis, and over a third have had sleepless nights.

What can you do about this?

Having a good relationship with the customer(s), agreeing payment terms in advance, invoicing promptly, and chasing payments before they're overdue. You can seek the help of an accountant or bookkeeper for this or alternatively, a trusted debt recovery firm or invoice financing from a lender.

Find out more.

Article by: Business Leader