Late payments are playing havoc with many SMEs’ cashflows, according to new data released today.
The research from Lloyds TSB Commercial finance shows that 30 per cent of all SMEs are experiencing cashflow difficulties, and more than half of these (58 per cent) blamed the problem on late payments.
Both of these figures is lower than when businesses were asked the same questions back in January, but late payments remain the number one cause of cashflow problems. The second most common cause is a fall in demand or general lack of business (34 per cent).
Donald Kerr, MD of Lloyds TSB Commercial Finance, says: ?Our research shows that over a quarter of SMEs in the UK suffer from poor cashflow. While this figure has fallen slightly from the previous six months, the number is still significant. What’s even more striking is that late payment remains the number one cause of poor cashflow for small and medium sized firms.
?Firms can help to ensure they are less likely to encounter late payments by setting out clear payment terms with customers, and carrying out background checks. For many firms, invoice finance can also help them manage the payment gaps, allowing firms to borrow against the value of current invoices.