A massive £18.6bn is the figure
put on outstanding payments owed to Britain’s small-to-medium
sized enterprises (SMEs) – a leap of £2.6bn
in the last year. That’s the main conclusion to
come out of new research commissioned by Bacs Payment
Schemes Limited (Bacs), the company behind Direct Debit
and Bacs Direct Credit.
When quizzed as part of Bacs’ annual
business omnibus, SME owners from around the country
claimed fewer of them were experiencing late payment
problems than a year ago (59% in 2006 versus 51% today).
However, further probing from Bacs about the value of
outstanding money unearthed a bleaker picture. Figures
showed that the average amount owed to an SME at any
one time is £30,000 - an alarming figure considering
almost a third (29%) of those surveyed claimed they could
go bust if faced with overdue invoices of up to just £20,000.
The not-for-profit industry body behind
Direct Debit and Bacs Direct Credit also found that almost
a fifth of SMEs (19%) now employ a dedicated person to
chase in late payments – losing an average of 17
working days a year to this onerous task.
Figures also revealed some stark differences
in the regions, with SMEs from Greater London faring
far worse than their counterparts in other areas. They
are the most likely to experience a problem with late
payments – 65% versus the national average of 51%.
They are owed an average of £51,000 at any one
time, that’s £21k over the national figure
,and they are spending, on average, 38 days a year chasing
in late payments – that’s more than double
the amount of time spent by companies in any other region.
In comparison, SMEs in the North East
(including Yorkshire and Humberside) are the least likely
to experience problems – 42% have issues with late
payments at one time or another versus the national average
of 51%. And North West SMEs have the best results when
it comes to chasing in overdue invoices – 45% have
experienced late payments from customers from time to
time, far less than the national average, and they spend
an average of just 12 days a year chasing guilty suppliers.
Commenting Michael Chambers, managing
director of Bacs, said: “Our latest business figures
paint an interesting picture about the culture of late
payments across Great Britain – with some surprising
regional pockets of success, and failure. But the most
striking thing – at a national level – is
that the scale of late payments has grown in value yet
again, despite companies investing a significant amount
of time and money to secure the demise of the problem.
"Making the decision to employ
someone to chase in late payments is a big step for any
SME company – and it can be effective. But it can
also be time consuming and repetitive month-on-month
if the right tactics aren’t employed from the start.
British SMEs need to be much smarter about tackling late
payments and should use a range of solutions, including
automated payments, to stamp out the problem once and
for all."
