Late payment remains a concern for many small businesses, according to the latest research from the national small business group, the Forum of Private Business.
In the organisation’s latest banking and finance survey, published on 13 May, 23 per cent of members reported an increase in late payment over the past year compared with only three per cent who reported a decrease.
A total of 29 per cent had also seen an increase in the average number of days beyond the deadline that a payment is made late while eight per cent reported a decrease, and 19 per cent saw an increase in both elements of late payment.
Respondents were keen to see more measures to tackle the issue, with 39 per cent saying they would like to see prompt payment better promoted and 37 per cent that they would prefer to pay VAT on money that has entered their account rather than when an invoice is submitted. A total of 36 per cent wanted to see persistent late payers barred from government contacts.
Phil Orford, chief executive of the forum, said: “Upwards of £30 billion remains tied up in late payments, costing a typical small business 130 hours a year to chase and meaning that a third are forced to seek external finance to cover the gaps in cash.”
Businesses facing financial challenges as a result of late payments, or for any other reason, should always seek professional advice, at the earliest possible stage, to help identify options for resolving difficulties and make informed decisions about the way forward.
Palmers can provide expert advice on a wide range of insolvency matters – for more information, please visit our website .
For advice on recovery of late payments and insolvency matters, contact Andrew Skinner.