[UK] Small businesses owed £70 billion in late payments

New research has revealed that the UK’s small businesses are still waiting for an estimated £70.4 billion in unpaid invoices, directly affecting their cash flow, payroll, investment decisions, and ability to meet tax deadlines, bytestart reports.

The specialist insurer Hiscox found that, more than a year since the government introduced the Fair Payment Code to encourage better payment practices, late payment continues to be an issue for many sole traders and small firms.

Hiscox surveyed 1,000 small business owners and sole traders via Censuswide for its first Late Payments Report. The survey reportedly showed that:

• Small businesses are owed £12,357 on average in late payments each year

• 23 per cent of all payments arrive late

• Businesses chase 14 late payments a year on average

With around 5.7 million small businesses operating in the UK, the insurer estimates that outstanding payments could total £70.4 billion nationwide. Its full report is available here.

A late payment takes, on average, three weeks from the original due date before it is settled. Across all outstanding invoices, businesses spend the equivalent of 331 days waiting over the course of a year.

For 17 per cent of small businesses, average payments are delayed by more than a month beyond the due date, while some invoices are simply not paid at all.

The proportion of late payments reportedly increases as businesses grow. Hiscox found that 19 per cent of payments to sole traders are late, and 25 per cent of payments to businesses with 10 to 49 employees.

The industries chasing the greatest number of late payments on average each year are:

• IT and Telecoms: 18

• Finance: 17

• Healthcare: 16

• Retail, Catering and Leisure: 15

• Legal: 14

For IT and telecoms freelancers, this represents more than one late invoice per month on average. In project-based work, where invoices can be for significant sums, delays represent real financial stress and disruption.

Source: bytestart

(Link via original reporting)

New research has revealed that the UK’s small businesses are still waiting for an estimated £70.4 billion in unpaid invoices, directly affecting their cash flow, payroll, investment decisions, and ability to meet tax deadlines, bytestart reports.

The specialist insurer Hiscox found that, more than a year since the government introduced the Fair Payment Code to encourage better payment practices, late payment continues to be an issue for many sole traders and small firms.

Hiscox surveyed 1,000 small business owners and sole traders via Censuswide for its first Late Payments Report. The survey reportedly showed that:

• Small businesses are owed £12,357 on average in late payments each year

• 23 per cent of all payments arrive late

• Businesses chase 14 late payments a year on average

With around 5.7 million small businesses operating in the UK, the insurer estimates that outstanding payments could total £70.4 billion nationwide. Its full report is available here.

A late payment takes, on average, three weeks from the original due date before it is settled. Across all outstanding invoices, businesses spend the equivalent of 331 days waiting over the course of a year.

For 17 per cent of small businesses, average payments are delayed by more than a month beyond the due date, while some invoices are simply not paid at all.

The proportion of late payments reportedly increases as businesses grow. Hiscox found that 19 per cent of payments to sole traders are late, and 25 per cent of payments to businesses with 10 to 49 employees.

The industries chasing the greatest number of late payments on average each year are:

• IT and Telecoms: 18

• Finance: 17

• Healthcare: 16

• Retail, Catering and Leisure: 15

• Legal: 14

For IT and telecoms freelancers, this represents more than one late invoice per month on average. In project-based work, where invoices can be for significant sums, delays represent real financial stress and disruption.

Source: bytestart

(Link via original reporting)