Dun & Bradstreet has found it is putting the future at risk for 58 per cent of SMEs. Edward Thorne, UKI managing director at Dun & Bradstreet, told Real Business: Although initiatives like the Prompt Payment Code are helping to highlight the issue, late payments pose a very real risk and can have a significant impact on the financial success of smaller businesses. Dun & Bradstreet’s research revealed an average late payments amount of ?63,881 for each SME, with 11 per cent owed between £100,000 and £250,000. This withholding of payments brings about cash flow difficulties for 35 per cent, delayed payments to other suppliers for 29 per cent and reduced profit performance for 24 per cent. Robert Blackburn, from Kingston University’s Small Business Research Centre, added: “This [late payments issue] seems to worsen during difficult economic times. Although many SMEs are able to tighten their belts during an economic slowdown, late payment adds further pressure on cash flow.
Key late payments statistics
- 51 per cent say late payments are more of a problem than they were three years ago
- 58 per cent say late payments are putting the business at risk of failure
- 51 per cent of SME owners use personal savings to cover the shortfall from late payments
- 36 per cent of SMEs don’t credit check any customers
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