Three out of five small businesses have been affected by the late payment epidemic, as they await £50m in unpaid invoices.
YouGov and Hitachi Capital Finance ran a study on 12000 companies.
The study showed that problems with late payment tend to mainly affect the manufacturing, legal and logistics sectors. 81% of Respondents confirmed issues of late and non-payment in the manufacturing sector. This compares to the agriculture sector, who were found to be the least affected sector, with only 50% respondents having to deal with late or non-payment.
By region, small businesses in London were the most likely to be victims of late or non-payment, with 70% having a late payment that was due for June this year. 36% of respondents stated that this was a serious issue.
It is the small businesses that are suffering. 63% of businesses with a yearly turnover of less than £1 million are affected, with only 30% reporting their invoices to have been paid on time. Small businesses have a higher risk of late payments, believed to be due to the susceptibility of delays of larger firms. Not only does this affect their finances, but also their valuable time and resources they have to put towards chasing the late payers.
Hitachi Capital Business Finance managing director, Gavin Wraith-Carter, speaks of the matter. He explained that at the economy’s critical state it is in today, we must make sure that the small businesses are the ones that push our country towards growth. The issue of late payments is a massive threat to this.