Research carried out by commercial data provider Dun & Bradstreet has suggested that the average UK small business is owed £63,881 in late payments.
A further 11% of small firms are owed between £100,000 and £250,000 in such payments, Dun & Bradstreet found.
A lack of payment has created cashflow issues for 35% of firms, whilst 29% of businesses have to delay paying other suppliers as a result of late payments. A worryingly high 58% of businesses stated that late payments put their business at risk of failure, Dun & Bradstreet found.
In addition, 36% of firms don’t perform thorough credit checks on their clients. Dun & Bradstreet urged businesses to make sure that they have detailed knowledge of a client’s payment behaviour prior to entering into a contract with them.
Commenting on the matter, Edward Thorne, UKI Managing Director at Dun & Bradstreet, said: ‘Although initiatives like the Prompt Payment Code are helping to highlight the issue, late payments pose a very real risk and can have a significant impact on the financial success of smaller businesses.’