Cash is king, the old saying goes, and yet UK-based small businesses are currently forced to make do with the court jester, waiting up to two months to get paid. The hardest hit sector is retail and distribution which is owed nearly half the late payment debt: £16.6bn.
The Bacs report makes for grim reading. Half of all British SMEs – that’s around 861,000 firms - are currently experiencing late payments. The worst offenders are large companies, responsible for a whopping 48% of SME late payment debt (up from 33% in the previous quarter). Public/private companies are the second worst payers, behind 20% of late payments.
In contrast, Government and not-for-profit organisations are among the promptest payers: just 9% of SMEs have experienced overdue payments from these guys in the last quarter. It seems that the Government's recent drive to reduce payment times from Whitehall was a success. Now it just needs to force other businesses into line.
Mike Hutchinson, head of marketing at Bacs, stresses the scale of the problem: 'The issue of late payment is continuing to get worse for SMEs in the UK at a time when they need to be able to plan ahead for growth and ensure a strong cash flow.' Come on Cameron and Clegg, it’s time to step in and penalise late payers.
Are you waiting on a payment? Enter the culprit into the Forum of Private Business’ Late Payment Hall of Shame. Just email email@example.com, including any relevant background information and copies of letters/emails.