The data was taken from Lloyd’s bi-annual ‘Business in Britain’ survey, which involved over 1,700 firms across the UK, spanning a variety of sectors. Thesurvey revealed that over a third of businesses (35%) are currently experiencing cashflow troubles. This represents an increase from the same period last year when 28% of businesses stated their cashflow difficulties.
Over half (54%) of small and medium-sized businesses experiencing cash flow difficulties have stated that late payments are the cause. However, the number of companies stating late payments as the reason for poor cashflow, has decreased slightly from last year (60%). Fall in demand or lack of business (39%) follows late payments as the second largest cause for cashflow problems.
SmartDebit, which provides businesses, charities and clubs with the facility to collect business-to-business and business-to-consumer Direct Debits, urge firms to take advantage of the innovative payment collection services available on the market place to help ease the pressure on small businesses. A spokesperson from the Surrey-based bureau commented: “More needs to be done to rid the UK of its late payments culture. The Prompt Payment Code has been around for 5 years now, and still we have small businesses suffering from the length of time taken to settle invoices, some companies having to wait up to 6 months to receive owed monies.” He continues, “In a recent survey, 35 per cent of small and medium-sized businesses stated that late payments of just £20,000 would be enough to put them out of business. We urge companies to take the initiative and deploy payment collection methods to ensure they receive funds on time, every time.”
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