Research published by digital business banking platform Tide has revealed that SMEs across the country are chasing more than £50bn worth of late payments.
Tide surveyed 1,000 CEOs, founders directors and senior management staff at SMEs in December to analyse their use of time during their working day.
The study found that the average UK SME is chasing five outstanding invoices at any one time, amounting to an average of £8,500 being owed and 1.5 hours per day – or almost 900,000 hours in total per day – being used.
People who are self-employed and working alone have an average of four outstanding invoices at any one time, amounting to almost £1,000. Businesses with between 10 and 50 employees have an average of 7.5 invoices outstanding, amounting to over £13,000 being owed.
Businesses based in London have the roughest ride in terms of late payments, with businesses in the capital claiming to have an average of seven invoices outstanding, with over two hours per day spent chasing.
London is closely followed by Scotland, with businesses having an average of six unpaid invoices, equating to an hour and a quarter per day spent asking for payment. Businesses in the South West have it best, waiting on three invoices to be paid.
Late payments are a significant issue for SMEs, with research from the Federation of Small Businesses in 2016 stating that 50,000 small businesses are put out of business annually by this behaviour, a £2.5bn hit to the UK economy.
Oliver Prill, CEO of Tide, said: “It has been known for a while now that late payments are crippling SMEs, with the government having tried a number of times to address the issue. It is however shocking to see exactly how much time SMEs, and particularly the self-employed, are wasting by having to chase clients to pay promptly.
Cash flow is crucial for SMEs, and just a few late payments can tip them into danger of becoming insolvent.”
In addition to wasting time chasing payments, decision makers and senior leaders at SMEs are spending 30% of their working day (12 hours per week) on unprofitable admin tasks, based on the average weekly hours worked. This is equal to almost two and a half hours each day (30%) – totalling 12 hours per week spent on tasks such as banking, expense management, book-keeping and accountancy.
83% say they regularly work outside of ‘normal’ office hours, with more than half (55%) working weekends and 2 in 5 working on bank holidays (40%).
The post UK SMEs chasing £50bn in late payments appeared first on UKTN (UK Tech News).
Link: UK SMEs chasing £50bn in late payments
Source: Assent Information Services
