New study highlights impact of ‘late payment culture’ on SMEs
The UK’s worsening late payments crisis is having a detrimental impact on investment, innovation and growth for small and medium-sized enterprises (SMEs) a new study suggests.
Far-reaching research from fintech firm Concur has revealed that 40 per cent of SMEs have received at least one late payment within the last month, while 63 per cent have received at least one late payment every single month in 2017 so far.
The report, entitled Invoice Utopia, quizzed more than 1,200 SMEs to determine the most common effects of late payments on Britain’s businesses.
It found that 17 per cent of firms had been forced to turn their backs on planned investments due to their problems with late payments, while 15 per cent had been forced into a position where they were unable to pay salaries.
A further 10 per cent said that unpaid invoices had forced them to significantly reduce spending on innovation and technology, while seven per cent of firms said that they had been forced to make redundancies.
Emma Maslen, Senior Regional Director for Enterprise at concur, said that it was “shocking” that so many SMEs were so heavily affected by the UK’s late payments culture, and that the report highlighted the “very real risk” such culture poses to “some of the country’s leading employers.”
However, she praised SMEs’ flexibility and expertise in attempting to keep on top of the issue.
She said: “Although not cash-rich, small and micro businesses have the agility and flexibility to make strategic decisions when it comes to cash flow. And of course, enterprises more often than not have a ‘cash cushion’ available to bail them out in difficult situations.”
Going forward, however, she suggested that serious change was needed in order to tackle the growing problem.