Research suggests average UK small business owed £63,000 in late payments
The impact of late payments on small business cashflow has been quantified recently by commercial data provider Dun & Bradstreet.
Small business cashflow troubles in numbers
The recent research offered key insight into the cashflow issues experienced by small businesses:
- 35% of firms stated that a lack of payment created cashflow problems for them
- The average UK small business is owed £63,881 in late payments
- A significant 11% of small firms have between £100,000 and £250,000 outstanding
The impact of small business cashflow gaps
Unsurprisingly the research also identified some key statistics in regards to the impact for small businesses to keep up with paying their own debts.
Worryingly 29% of businesses admitted to delay paying their own suppliers, as a result of late payments. A high 58% of businesses stated that late payments put their business at risk of failure.
The research also identified that some small businesses could do more to protect themselves from the impact of late payments. 36% of firms said they don’t perform credit checks on their clients, entering into contracts without understanding their payment behaviour.
Commenting on the matter, Edward Thorne, UKI Managing Director at Dun & Bradstreet, said: ‘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.’
How HJS can help
If your business has been impacted by late paying clients having a cashflow forecast can be a real help. Having an understanding of when cash may be low in your business, perhaps after paying your VAT bill for example, will help you to manage those unexpected cashflow problems when they arise.
HJS can help you get better insight into your business finances – talk to us today on 0808 1644 222.