44% of SMEs have experienced problems when their invoices are paid late, with those affected owed £20,000 in outstanding payments on average, according the Close Business Barometer.
Nearly a fifth of businesses included in the research reported spending over ten hours a month chasing unpaid bills. 15% of those surveyed said that they struggled to keep the business going as a result of the unpaid invoices, whilst 58% said that it impacted on their ability to maintain their day-to-day cashflow and 17% said that they had to cut back expenditure to cope with the delays
“This increasing debt burden is a worrying situation for small firms. Of the businesses we spoke to that are facing problems due to unpaid invoices, 44% say that they are owed more than £20,000,” said David Thomson, CEO of Close Brothers Invoice Finance. “This is constricting their cashflow and the knock-on effect is that it prevents them from being able to pay their suppliers on time, thus creating a vicious cycle.”