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E-invoicing, SCF & E-procurement

60 per cent of SME invoices unpaid within debtor day period - report

Wednesday 11 January 2017 | 10:15 AM CET

More than half (61%) of invoices issued by UK small and medium sized enterprises (SMEs) remain unpaid within the debtor day period, a new report shows.

According to a report commissioned by Amicus Commercial Finance, almost three-quarters (70 %) of companies say they rely on getting paid during their debtor day period to avoid facing a shortage of working capital.

The research shows that one in six (16 %) SME invoices remains unpaid after 90 days and of these, almost half (7 %) have yet to be settled after six months.

According to Amicus Commercial Finance, invoice payment terms are all too often ignored and for small firms this can put their cashflow under intolerable pressure, particularly when late payers are also large customers.

Medium-sized businesses with between 50 and 249 employees are the worst affected by delayed payments with a quarter (24 %) of invoices remaining unpaid after their debtor day period or not at all.

The study underlines the extent to which SMEs often rely on a small number of customers and delayed payments from these can have serious consequences; according to the findings, SMEs’ top three customers on average account for almost half (49 %) of their overall revenue.

Almost a third (28 %) said delayed payments caused them considerable stress and anxiety and a fifth (19 %) reported their frustration had turned into anger. One-in-ten (10 %) admitted they became scared their business would go bust.

In order to mitigate the impact of late payments, growing numbers of SMEs are turning to invoice finance to secure reliable cashflow.

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