Category: Finance for Contractors

Nearly three-quarters of small and medium-size enterprises (SMEs), including umbrella payroll companies, are affected by late payments.

Across the UK, businesses have invoices worth £15.7 billion more than 120 days in arrears, according to research from NatWest and RBS.

The time wasted chasing this debt has a wide-ranging impact on the firm itself and the wider economy, yet nearly half of SMEs have taken steps to improve their cash flow.

"Bad debts and late payment of invoices are endemic problems for UK businesses," said Peter Ibbetson, chairman of small business at NatWest and RBS.

Late payments were responsible for 4,000 business failures in 2008 alone, warned Stephen Alambritis, head of public affairs for the Federation of Small Businesses (FSB).

The FSB has previously highlighted that local government agencies often pay invoices late, despite making commitments to settle debts within ten days under the Prompt Payment Code.

Posted by Sarah Putt