£1.1bn owed on any given day
SMALL and medium sized businesses in the North East already struggling to cope with the effects of the economic downturn are owed more than £1.1bn on any given day.
According to Barclays Local Business annual Late Payments report, on a typical day a SME is £2,147 out of pocket as a result of suppliers or customers failing to pay during the standard 30-day term.
It left local SMEs nearly £370m out of pocket over the last 12 months due to non-payments - an average of £767 per business.
Amanda Shepherd, regional director for Barclays Local Business said: “It’s concerning that late payments are such a problem in the North-east. This is a serious issue for the businesses we talked to - well over a third (41%) say that it threatens their day-to-day survival.
“The businesses that will survive and thrive during the downturn are taking late payments seriously. We’ve seen a massive take-up of our in-house credit checking service. Credit checking services are a powerful tool for deciding who to do business with, and who will pay on time.
“Last year, we began providing the service free to all small businesses, not just our own customers, and we’ve been overwhelmed with its popularity.
“It’s clear businesses in the North-east are reacting to the downturn by keeping an even closer eye on their money.”
Barclays Late Payments report found the problem was endemic across the UK with nearly three million SMEs (around 60%) experiencing problems - 850,000 more than last year.
Around a third admitted that customers or suppliers failing to pay on time threatened their day-to-day survival, while around 1.5 million bosses have had to use personal funds to tide their business over while they wait on outstanding payments.
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