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Late payment gets later

London, UK (27/06/2011)

LONDON (Management Today) A survey has suggested that late payment is getting worse - and small businesses are struggling to cope.

As long as money has been exchanged for goods and services, customers have been coming up with excuses as to why they can't stump up the cash on time. But a new survey has suggested that far from it improving as the economy recovers, late payment is actually getting worse. Sage's monthly Omnibus found that more than a third of small business owners believe late payments have actually got later over the last six months - and 30% say their cashflow situation has deteriorated as a result. Which doesn't bode well for the recovery.

The survey, of  just over 1,000 business, echoes a similar one by Bacs last month (a month ago today, actually), which found that the average waiting time is now a whopping 39.5 days past business' agreed terms for payment. And the worst culprits? Big businesses, according to 35% of SMEs (who are presumably a lot more vulnerable, cash-flow wise, than their larger counterparts).

But even though 45% of small business owners said that managing cashflow is one of their main worries this year, it seems they're a magnanimous bunch. Because while they're struggling to find the cash to pay their own bills, just 10% of SMEs said they'd consider charging interest on late payments. That's despite the fact that they have a legal right to do so. (Although admittedly, in many cases it's probably got less to do with kindness than maintaining relationships with key clients). 

According to that Bacs survey, though, chasing up payment is now taking up an average of 3.4 hours of business' valuable time a week. When you look at it like that, charging interest suddenly seems like a good idea. Well - it's cheaper than bringing in the bailiffs.

For more information plase click on the following link: http://www.managementtoday.co.uk/bulletin/mtenterpriseweekly/article/1076769/late-payment-gets-later/



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