July 14 2017
The results of a new survey by BACs, the organisation behind Direct Debit payments in the UK, has laid bare the scale of the problems faced by Small and Medium sized Enterprises (SMEs) due to unpaid overdue invoices.
A telephone survey of a representative sample of 304 of the UK's 1.7m SMEs found that 38 percent say they have to wait beyond agreed terms for payments. Of these, 16 percent find it is affecting their ability to pay their staff on time and 28 percent of directors have reduced their own salaries to maintain levels of working capital in the business.
In a striking illustration of how the problem of late payment spreads through the economy, 32 percent of businesses say that overdue payments have forced them to hold back payments to their own suppliers.
The survey also looked into the amount of time that companies have to wait for late payments, with almost a third of companies having to wait at least a month beyond terms for payment and nearly 20 percent facing delays to payment of more than 60 days.
BACs estimate that UK SMEs are owed more than £14bn of late payment debt, with seven percent of surveyed companies saying that the level of unpaid invoices has put them in danger of bankruptcy.
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