Over a quarter of British small and medium-sized businesses admit to being owed between £5,000 and £20,000 in unpaid invoices, according to a survey by Payit, a payment solution by NatWest, in partnership with Censuswide.
SMEs account for nearly two thirds (61 per cent) of UK employment. Late payments have taken a toll across the country, with SMEs also reporting that over a third (36 per cent) of payments in an average month arrive late.
London-based businesses face the brunt, experiencing delays in 41 percent of payments. As SMEs account for nearly two-thirds of UK employment and form the backbone of the economy, the impact of late payments is significant.
Over half (55 per cent) of SMEs report that late payments have increased in the last six months, compounded by the rising cost of doing business.
Nearly half (46 per cent) of small businesses also claim the time associated with chasing invoices as having the most noticeable impact, with 31 per cent of businesses spending between 21 to 30 hours per month chasing customers.
Tackling the issue
“The numbers revealed in this latest research from Payit are shocking and confirm why it is so important we tackle the unfair practice of companies withholding payment they owe to SMEs,” says Terry Corby, founder and CEO of campaign group Good Business Pays.
“We need to recognise that small businesses are not just businesses – they are peoples’ lives. As we approach the festive period, it’s time that every company does the right thing and pays on time.”
Payit by NatWest
At present, bank transfers account for payments received by over half (55 per cent) of SMEs, with an additional third (33 per cent) receiving payments by card. Using open banking technology, Payit offers a new way for businesses to collect and send payments online and in person, removing the need for sharing and storing card details.
Users also have the option to generate a QR code, which they can then share directly and immediately with customers, offering a straightforward way to collect payments digitally.
Mike Elliff, CEO of Payit by NatWest, also commented: “Small businesses pave the way for growth and innovation, however, two of their most precious resources – time and money – are being wasted. As a business, knowing that you can rely on payments being received in near-real time can make a world of difference.
“To date, Payit has processed over 10 million payments, making it a tried and trusted tool for business owners across the country.”