Unpaid bills owed to small businesses at an all-time high

 In a press release issued earlier this month, BACS revealed that the amount owed to small and medium-sized businesses in late payments has reached £33.6billion. It’s an increase of 10% since last year, and the highest figure since the first survey in 2007.

 
On average, SMEs are owed £39,000 pounds each, and are waiting an average of 28 days beyond their payment terms for the money to come in.  But is the situation as simple as the headline figures suggest?
 
BACS report that half of all UK SMEs are experiencing late payments. Think about that for a moment. If half are experiencing late payments, that means the other half aren’t.  But we suspect a headline saying ‘Half of all SMEs are getting money in on time’ would have received rather less media attention. 
 
It would be fascinating to look into what the half who are getting paid are doing differently – could it just possibly be anything to do with the way they manage credit control?
 
Two further interesting facts emerge:
 
·         11% of business owners say that waiting for important payments makes them ‘very worried’. 
·         A further 13% are worried about the consequences late payment will have on their business. 
 
Does this really mean a staggering 76% of business owners are only mildly concerned about late payment and the consequences for their business – despite the sums of money involved?  Are they so cash-rich that they can comfortably shoulder figures that may be substantially higher than the overall average of £39,000 every month, without risking any consequences to their business?
 
Bury-the-head-in-the-sand syndrome is alive and well.  It’s no wonder that cash flow problems continue to be one of the biggest causes of business failure.
 
Is your business one of the 50% who get paid on time – or amongst the 50% who don’t? Give us a call on 01625 878198 to find out how we can help.