Late payments are a problem that plagues many small businesses and it’s an issue that continues despite Government attempts to fix it. A recent survey has found that micro businesses are currently owed £2.5 billion in late payments.
WorldPay, a payments provider, carried out the research and spoke to 1,000 mobile tradespeople and micro-businesses. 75% of them said they’d had a late payment in the last year, while they also claimed that individuals were the worst at paying on time. According to respondents, 60% thought lone consumers were the biggest problem, while only 17% considered large companies to be worse.
Late payments are a huge problem for smaller companies as it can throw off a business’s cash flow and leave them struggling. What is more troublesome is that £2.4 billion of this owed money is written off per year and never received.
According to the research, 54% of businesses just see late payments as part and parcel of running a company. 76% say that some people will always pay late no matter what is done.
What is also concerning is that the problem seems to be growing. Four out of ten businesses said the problem is worse than it was a year ago. There is also a lot of concern about the amount of time spent getting owed money and the damaging effects this has on client relationships.