East Anglia: Region’s small and medium sized firms are deterred by late payments

PUBLISHED: 06:33 27 January 2013

Mark Suthern, Head of Relationship Banking, Barclays Business Banking, Eastern

Mark Suthern, Head of Relationship Banking, Barclays Business Banking, Eastern

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.”

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  • Unfortunately Mr Cameron Isaliar the main offenders are generally the big companies - not only do they screw you down on price but many frequently take more than three months to settle their bills. It is easy to get credit checks run on potential customers to try to minimise problems but when the big boys still don't pay up on time there isn't much you can do if you need their business.

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    Rosie Specs

    Monday, January 28, 2013

  • Pity they are not in the business of naming and shaming. The late-payers will likely be zombie outfits awash with debt and no realistic prospect of ever recovering, being kept barely out of administration by directors involved in late-paying and other unethical actions in order to keep "alive" the zombie from which they are banking their fat remunerations for each month they can continue getting away with it.

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    Mr Cameron Isaliar

    Sunday, January 27, 2013

  • What business can afford late or non payment? Remember they work hard to honour the contracts only to be given the run around when it comes time to pay.

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    Sunday, January 27, 2013

  • What is the route cause of this problem? Unfortunately the article leaves us in suspense. When firms start using their suppliers as an unsecured line of credit this creates a domino effect, not unlike a chain letter, causing many businesses unrelated to the original problem to get a share of the pain. I sincerely hope none of the companies present at the Norwich For Jobs launch party are guilty of late paying, because this seems to be a very real reason why the economy is not growing and therefore the yoof cannot find jobs. No growth = no new jobs created. Can Chloe Smith and the other clever sorts involved in her vote-chasing devote some of their doubtless abilities to tackling this fundamental blockage in the UK economy, or are they all burned-out doing electioneering PR? Last week the EDP gave a tiny section to renewed calls for a Business Bank. Another potential solution that companies are crying out for, but one which the coalescent government has been piddling around doing nothing about for the past two and a half years. If you lot really want to promote growth and therefore reduce unemployment you should be making more noise about this and spending less time promoting politicians' gimmicks.

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    Mr Cameron Isaliar

    Sunday, January 27, 2013

The views expressed in the above comments do not necessarily reflect the views of this site

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