According to recent research from Bacs Payment Schemes, late payment debt for UK businesses has reached £46.1 billion. In effect, approximately one quarter of UK businesses are paying their suppliers late because they themselves are still waiting for payment.
Bacs explained in a statement that 60 percent of UK SMEs are now experiencing late payments, with the average SME waiting for £38,186 in overdue payments. Additionally, surveyed firms said they are forced to bear additional costs of £9.16 billion per year, with around a third reportedly spending around £500 per month because they are waiting to receive funds.
“Despite the positive signs emerging about the financial state of the nation as a whole and the fact that we are thankfully moving out of recession, SMEs, which everyone agrees are the drivers of a successful economy, are being held back because of the increasing pressures of late payments,” Mike Hutchinson, director of scheme support and development at Bacs, said in a company statement.
The research also showed that the manufacturing sector is most likely to be impacted by overdue payments (72 percent of those surveyed). The other sectors most likely to be affected by late payments are the services sector (63 percent) and the transport, retail and distribution sector (48 percent).
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