Failed payments sting small businesses
Jun 5 2009 by Peter McCusker, The Journal
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 due to suppliers or customers failing to pay on time, according to a new report.
The Barclays Local Business annual Late Payments report found that on a typical day small businesses across the North East are £2,147 out of pocket as a result of suppliers or customers failing to pay during the standard 30-day invoicing period.
This total figure resulted in SMEs in the North East losing nearly £370m over the last 12 months due to non-payments – an average of £767 per business.
Amanda Shepherd, regional director for Barclays Local Business in the North East, said: “Despite some recent positive economic signs, 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.
“It’s clear businesses in the North East are reacting to the downturn by keeping an even closer eye on their money.”
Businesses in London and the North West are most likely to be impacted by late payments, with 73% of those interviewed admitting they were a problem.
SMEs in the North West are also owed an above average sum of £2,858 on any given day, while their West Midlands based counterparts face a daily late payment bill of £2,838.
