Most small and medium-sized enterprises (SMEs) fear taking action over late payments, according to a new white paper published by Paul Uppal MP, the Small Business Commissioner.
The white paper, “Taking Notice of UK Business” surveyed 500 SMEs in the UK specifically on the topic of late payments and payment terms.
The study found that SMEs are afraid to take legal action despite even though unpaid invoices are a “significant” issue for their business.
Three-quarters of respondents stated that they would rather not chase late payments due to fearing damage to their relationships with clients.
In addition, 76% of SMEs said that they were concerned that their invoices would not be paid at all if they took action on them.
More than one-third of SMEs said that they had experienced unfair payment practices, with 47% saying they had experienced late or unfair payment practices from large companies.
The majority of the businesses that were surveyed had payment terms of up to 30 days, with 14% stating they had agreed 61-day payment terms with suppliers.
Late payments continue to blight small businesses and can often lead to cashflow issues and eventually insolvency. We have a particular expertise in this area so to find out how we can help you tackle them sooner rather later, please contact us.