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SMEs face GBP 50,000 annual shortfalls due to late payments – report

Monday 25 May 2015 10:52 CET | News

Almost two-thirds (64%) of UK SMEs are owed up to GBP 15,000 a year in overdue invoices, a recent research reveals.

According to a recent study by law firm MLP Law, 4% of small and medium-sized business owners experience deficits of more than GBP 50,000 a year due to unpaid bills.

As a whole, the SME sector reportedly faces annual shortfalls approaching GBP 8.2 billion as a direct result of late payments, according to figures from the Bacs Payment Schemes.

Unpaid invoices remain a common problem with almost half of small firms experiencing unpaid invoices at least once a month. Meanwhile, 52% of small business owners confirmed they are forced to write off up to ten invoices annually simply as a “bad job”.

The survey also points out that cash flow problems (84%) remain the most common reason for late payments, followed by an inability to pay employees and suppliers (36%), strained relationships with suppliers (21%) and lower than anticipated business growth (12%).

The vast majority (68%) of small firms do not seek legal advice to resolve their cash flow issues with almost half (48%) of SME owners believing it to be too expensive. Meanwhile, a third (34%) of SMEs claimed they simply did not have the time to pursue unpaid invoices.


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Keywords: SMEs, shortfalls, late payments, report, overdue, invoices, UK, unpaid bills, Bacs Payment Schemes, cash flow
Categories: Banking & Fintech
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Banking & Fintech