Late payments cost SMEs £2bn a year

Figures from direct debit processor BACs show SMEs are owed a total of £14bn by customers leaving them with a bill of more than £2bn ever year. SMEs are increasingly relying on overdrafts and 16% struggle to pay staff on time. The majority spend almost four hours a week chasing late payments, and 12% have to employ someone dedicated to pursuing outstanding payments. The research by Bacs also shows one in five small businesses say being owed between £20,000 and £50,000 would be enough to drive them into bankruptcy while some 7% of businesses say they are already in that danger zone. However, the total figure owed is down on the £30.3bn figure recorded five years ago.

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