Saturday, April 11, 2009

Rise in Late Payments to Businesses


According to Bacs Payments Schemes Limited (Bacs) small and medium size enterprises (SMEs) are now owed £25.9 billion. This is apparently due to a 40% increase in overdue payments over the last year.

Whatever the state of the economy, late payments are always a problem for small businesses, but in a recession this is even more devastating. It is a pity that there is nothing the Government can do to help businesses with the issue of late payments.

According to the research by Bacs:

  • the national average of outstanding payments was in £38,000 (£30,000 in 2007)
  • overdue invoices in the Midlands were the highest at £69,000
  • 57% of businesses are owed money (up from 51%)
  • manufacturing had the highest rate of late payments being 65% and
  • the most common cause of late payments was cash flow issues.

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