Starting a new business? Get 40% off our accountancy services for 3 months! 😀

x

Late payments can have a dramatic effect on how a business operates. It can lead to a halt in expansion, laid off workers or even the closing of a business.

The latest Zurich SME Risk Index has revealed that over half (52%) of Britain’s small to medium businesses are owed money from late payments. This makes an estimated total of £44.5bn lost to late payments, a significant blow to businesses and the economy.

1000 SME owners and key decision makers were surveyed. The survey found that 21% are owed over £25,000 and 9% are owed more than £100,000 in late payments.

 

A long wait

Of the businesses who have experienced late payments, 64% say the typical delays they experience are over a month on payments already 30 days overdue. 45% say they’ve experienced late payments of up to three months and 14% have not been paid for up to six months.

As cash flow is vital to the daily functioning of a business, 65% of SME owners say that late payments are forcing businesses to close down because of the problematic cash flow.

39% say that late payments have had a significant effect on their cash flow. 24% say that late payments have led their business to go into its overdraft.

 

A lack of help

As the government and the public relies on small businesses, late payments can affect the economy and the community alike.

Of those surveyed, 50% say that the government should be doing more to help out SMEs in this position in terms of support and legislation.

Head of SME proposition at Zurich, Paul Tombs said: “£44 billion owed in late payments to British SMEs is an enormous sum. It is no surprise that many have experienced cash flow problems or have been forced to enter their overdrafts as a result.

“On an individual basis, many small businesses are owed hundreds of thousands of pounds. In an environment where cash flow is key to small business survival, the situation is simply unsustainable. It is imperative that SME owners receive the support and guidance required and fair access to the funds that they are owed to secure the future of their businesses.”

 

 

Have you ever experienced late or missed payments? How did it affect your business? Please share your thoughts in the comments.

About The Author

Kara Copple

An experienced business and finance writer, sometimes moonlighting as a fiction writer and blogger.

More posts by this author
guest
0 Comments
Inline Feedbacks
View all comments

Read more posts...

Umbrella Companies for Self-Employed Contractors

When you set up in business as a contractor you might either work as a sole trader or as a limited company….

Read More

Get Ready for Small Business Saturday UK 2022

Small Business Saturday started in the US in 2010, on the first Saturday following Thanksgiving. It aims to encourage shoppers to consider…

Read More

Architects and Tax

Architecture is a highly diverse sector when it comes to tax. It’s partly down to the type of businesses that carry out…

Read More
Back to Blog...

Confirm Transactions

The number of monthly transactions you have entered based on your turnover seem high. A transaction is one bookkeeping entry such as a sale, purchase, payment or receipt. Are you sure this is correct?

Yes, submit my quote
No, let me change it

Please contact our sales team if you’re unsure

VAT Returns

It is unlikely you will need this service, unless you are voluntarily registered for VAT.

Are you sure this is correct?

Yes, the business is VAT registered
No, let me change it

Call us on 020 3355 4047 if you’re not sure.

Bookkeeping

You only need this service if you want us to complete the bookkeeping on your behalf.

Would you prefer to complete your own bookkeeping?

Yes
No

Call us on 020 3355 4047 if you’re not sure.