The Federation of Small Businesses (FSB) has called on the European Commission (EC) to 'up its fight' in order to put an end to the late payments culture.
In a new report, the FSB revealed that 85% of small businesses that operate within European supply chains are paid late.
Despite the introduction of the EC's Late Payment Directive, which outlines maximum payment terms of 60 days, 22% of businesses reported that they have been subject to payment terms of more than 60 days.
An additional 12% of firms have been asked for a discount in return for prompt payment, the FSB found.
The business group is calling for small firms' legal protection to be 'strengthened' against lengthy payment terms, and for sector-specific ombudsmen to be appointed for industries that 'are most at risk of late payments'.
'Poor payment culture is a problem without borders, damaging small businesses in the UK and across Europe,' said Mike Cherry, National Chairman of the FSB.
'Even with the UK leaving the EU next March, the reality is that the EU single market will remain the biggest market for British small firms for the foreseeable future. This is why it is vital that a culture of prompt payment flourishes across Europe.'