Britain’s late payment problem is getting worse rather than better, new research from the Federation of Small Businesses (FSB) has revealed.
According to the research, as many as 84% of small firms report being paid late, with a third (33%) saying at least one in four payments they’re owed arrives later than agreed.
A similar proportion (37%) state that agreed payment terms have lengthened in the past two years, hampering cash flow. Only four per cent say payment terms are improving.
“Small firms will applaud healthy public finances off the back of responsible management,” explained FSB National Chairman Mike Cherry. “However, what they need to see day to day is large corporations taking a similarly responsible approach to paying suppliers. Small firms currently have billions withheld from them by large companies that pay late.”
“Our late payment crisis causes the closure of an estimated 50,000 businesses a year, costing the economy £2.5 billion annually,” he said. “The collapse of Carillion saw the dangers of poor payment practice writ large. The sorry episode has cost jobs and ruined lives.”
“Improving the nation’s productivity forecasts starts by speaking out on late payments today. In doing so, the Chancellor will send a clear message to British boardrooms,” he added. “The late payment crisis will only end when we see a fundamental cultural shift in the boardroom, with those at the top collectively addressing the issue, and directors held accountable for supply chain support.”
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