Nearly two-thirds of SMEs’ invoices within the final yr had been paid late, in keeping with evaluation of invoices despatched by 1000’s of companies.
FreeAgent checked out information throughout its 200,000 buyer base and located that 62.6% of invoices weren’t settled on time.
Southall and Blackburn had been probably the most affected areas, with 77.9% and 73.6% of invoices paid late.
The report mentioned that even in areas the place the fewest invoices have been paid late, “the figures are nonetheless alarming”.
Ipswich is the most effective space for well timed funds, however 31.5% of invoices had been settled past the due date.
Solely three UK postcodes skilled a late cost fee of under 50%.
Late cost has lengthy been a difficulty for small companies. It prices the UK financial system £11 billion every year.
A authorities session is at the moment searching for views on proposed legislative measures geared toward tackling the issue. It runs till 23 October.
Roan Lavery, CEO and co-founder of FreeAgent, mentioned:
“Our figures spotlight a severe and rising problem for UK small companies. When almost two thirds of invoices are being paid late, it’s not simply inconvenient, it’s a elementary menace to enterprise survival and development.
“Late funds hit hardest on the very companies which might be driving our financial system, making it tougher for them to plan, make investments, and meet their very own obligations.
“Whereas there’s a session at the moment underway which intends to handle a few of these points, it’s important that we see motion from each policymakers and the enterprise neighborhood to create a tradition of immediate cost and to assist SMEs in embracing digital instruments that may defend their money stream.”
Emma Jones, Small Enterprise Commissioner and SMEWeb columnist, added:
“These figures paint a bleak image. We all know that on common 38 companies shut on a regular basis on account of late cost – this isn’t simply an inconvenience.
“I’m working to handle the difficulty of late cost by way of encouraging digital adoption as a result of hyperlink between utilizing software program and getting paid on time, energetic promotion of the Honest Cost Code that showcases firms with good cost efficiency, and direct contact with firms in opposition to whom circumstances of late cost are being raised.
“Late cost is a posh challenge, exacerbated by a difficult financial atmosphere, and we’re engaged on all the weather to attempt to get cash shifting quicker to small corporations.”
A separate survey by FreeAgent regarded on the penalties of late and non-payment for small companies.
Over a 3rd of small companies mentioned they wait as much as three months for excellent invoices to be paid, and 43.1% reported having to jot down off cash on account of late or non-payment of invoices.
One in 10 have had to surrender between £1,001 and £5,000.
On what will be completed to sort out the difficulty, 49% believed the Honest Cost Code ought to be made necessary for all companies.
