UK Businesses Struggling to Pay On Time
3rd January 2018.
Most businesses take more than 30 days to pay their suppliers, with the average term reaching as high as 113 days, a new survey has found.
According to new research by UHY Hacker Young, a majority of UK businesses are finding themselves strapped for cash and unable to pay their suppliers on time.
The accountancy firm asked around 200 businesses and found that only 29 percent of them manage to settle their accounts within 30 days or less, while a further 52 percent of invoices are not paid within the month.
Companies that exceed a £36m annual turnover, and a £18 million balance sheet or 250 employees, are now obliged to report to the Government twice a year on how long it takes them to pay their suppliers.
Richard Lloyd-Warne, a partner at UHY Hacker Young, insists that much has been done to encourage big businesses to pay on time, such as allowing interest levies on late invoices, as well as the recent small business commissioner role.
The Federation of Small Businesses (FSB) warns of the damaging effects the late payment culture could have on small businesses and self-employed workers. Mike Cherry, FSB chairman claims late payers are costing SMEs £18 billion, and insists late payment becomes the Government’s “top priority” in 2018.
Cherry further acknowledges this new duty to report is “a good step”, but “changes need to go further to allow the naming and shaming of those businesses who are putting the squeeze on small firms”.
Companies have until January or April to publish the data, and the new small business commissioner, Paul Uppal, will oversee a new complaints system.
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