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New data from Bacs shows that the total amount of outstanding payments which are owed to SMEs across the UK has risen to £33.6 billion, the highest it’s been since the first figures in 2007. In September 2010, the figure owing to SMEs was £30.4 billion. According to the research, the average amount owed to each SME is £39,000, with the time taken to receive the outstanding payment much longer.

Businesses all over the UK have to wait an average of two months for payments due, which includes the original 30 days given by businesses for payment of an invoice. Half of all small businesses are waiting for outstanding payments to be made. The research shows that large companies are responsible for almost half the outstanding invoice payments, the worst offenders. A fifth of the debt is due to public and private companies. The best payers are government agencies and not for profit organisations.

The survey did show that late payers are ready with excuses, with 55 percent saying the payment is waiting to be authorised, or that the bill is in the processing system. Unbelievably, 41 percent of companies use “the cheque’s in the post”.

Late payments cause a high level of stress for business owners, who have to spend time checking whether payments have been made. Late payments can also impact on a business’s ability to plan ahead for long term growth, especially important in times of financial uncertainty. The head of marketing at Bacs, Mike Hutchinson urges SMEs to automate the payments process if possible, to gain control over payments.

About The Author

Gary Fields

Content Writer working alongside our expert accountants to bring you the latest Tax and Accounting news.

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