A new survey has revealed that over the last six months the issue of late payments has worsened for over a third of small businesses, compounding the evidence gathered in a recent survey by BACS which highlighted the especially bad behaviour of large corporations when paying their suppliers.
More than 1,000 small-to-medium sized businesses were asked to take part in the survey which also uncovered that cashflow is becoming a bigger concern.
The research, which was carried out by software provider Sage, shows that 36% of respondents felt that instances of unpaid or overdue invoices have increased since the start of the year. Meanwhile, 30% of respondents claim that their cashflow has become less stable within the same period.
Worryingly only 10% of those being affected by late payment problems said they would charge interest once an invoice became overdue, which suggests that businesses may need to improve their credit control strategies.
Michael Barber, a Sage spokesperson, comments:
“One of the key lessons that many small businesses have taken from the recession is the importance of healthy cashflow. But as the results of our research show, tracking and chasing late payment remains a major issue for many SMEs who have seen their situation deteriorate in the past six months.
“Late payments are a fact of life for many small business owners, but good management can ensure they do not have a damaging effect on the business’s overall cashflow.”
