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SMEs waited double as long to be paid in 2019 compared to 2018

SMEs waited double as long to be paid in 2019 compared to 2018
SMEs waited double as long to be paid in 2019 compared to 2018

SMEs were left waiting up to 23 days longer than agreed for invoices to be paid in 2019, compared to just 12 days later in 2018, according to a report by MarketFinance Insights.

The UK’s small businesses are being put under huge financial strain as debtors leave them waiting longer and longer for invoices to be settled, a problem that is putting the survival of many SMEs at risk.

The report by MarketFinance Insights analysed over 100,000 invoices from 990,000 UK SMEs between 2013 and 2019.

Key findings from the report included:

  • Invoices being paid late were generally of a larger value than those being paid on time.
  • £34 billion is owed in late payments to UK SMEs, that’s an average of £34,286 per business.
  • The number of businesses facing late payments dropped from 43% in 2018 to 39% in 2019.
  • Larger debtors usually request longer payment terms and then also pay later when compared to smaller debtors.
  • Businesses in the professional and legal industry suffered the most with late payments.

The research found that late payments were particularly problematic in the professional and legal industry where a shocking 70% of invoices were paid late, compared to just 30% in 2018.

Other industries that are suffering significant late payment problems include manufacturing and retail.

Bilal Mahmood, External Relations Director at Market Finance said: “Late payment practices harm business cash flow, hampers investment and, in extreme cases, can risk business solvency. Separate research we’ve conducted highlighted that 87% of businesses are prevented from taking on more orders because of the cash flow constraint owing to late payments.”

If your business is having problems with late or non-paying customers, get in touch with our team of experts here.

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