British businesses that fall victim to late commercial payers are each, on average, owed almost £29,000, according to new research published last week.
A survey of 506 companies by Creditsafe also says 39% believe their profitability has been hit, while 30% say they couldn’t pay their own suppliers, both thanks to delayed payment.
Failure to pay invoices promptly has also caused problems for 10 per cent of firms, as they said they struggled to meet their tax commitments to HM Revenue & Customs.
Speaking to The Financial Times, which obtained the research, the Federation of Small Businesses said the late payment culture was now “epidemic” in the UK.
Despite laws in place to help firms claw back their monies owed, with interest, the majority of smaller firms turn a blind eye for fear of upsetting an already uncooperative customer.
And though public limited companies are now required by law to document their payment performance in filings to Companies House, an “unsatisfactory” number actually do so.
Such was the verdict in 2004 of Brian Cotter MP, who said that out of approximately 14,000 PLC(s) in the UK, only 4,100 complied by filing their performance with Companies House at their year-end.
Recently, credit management expert Graydon warned that many firms have not embraced the idea of demanding their statutory rights to interest, despite it being almost five years since the last amend to the 1998 Act became law.
Aug 28, 2007
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