East Anglia: Region’s small and medium sized firms are deterred by late payments
PUBLISHED: 06:33 27 January 2013
Ben Phillips / VisualMedia
More than a a fifth of small and medium-sized firms in the region have turned down future business from customers in the last year in an attempt to tackle late payments
In total, UK SMEs are currently owed more than £36bn in late payments causing serious cash-flow problems, with 92pc of firms in the region experiencing problems over the last two years.
New Barclays research found that in the past year, 32pc of firms in the region have declined to do future business with customers who have paid late in the past.
The research also reveals that the impact of late payments on decision makers is often significant with 25pc of respondents, who have experienced late payments in the past two years, having to use personal money or assets to boost their cash flow.
About 16pc of respondents have suffered extreme stress as a result, and 9pc said late payments have nearly caused a business to fail.
Mark Suthern, head of relationship banking, Barclays Business Banking, eastern, said: “Minimising late payments and effectively managing cash flow is crucial for the survival, as well as the growth of small businesses. With one in five businesses that cease trading citing bad debt as the reason, it is vital that SMEs tackle this problem and take action before it is too late.
“Faced with a continually challenging business environment, small businesses clearly have no other option than to take action against customers who repeatedly pay late. While it goes against all natural business instincts to turn customers away, it is entirely understandable when weighed up against the overall impact of the late payment on the future of the business.”