The UK’s worsening late payments crisis is taking its toll on the nation’s small and medium sized enterprises (SMEs).
According to the latest data, SMEs are missing out on more than £250 billion of liquid cash flow every single year as a direct result of the problem.
Figures published by insurance company Zurich towards the beginning of September found that the average UK SME is now owed approximately £16,250 on average from other businesses.
The research also found that more than half of late payments are owed to SMEs by much larger firms.
Peter Alderson, Managing Director of loan company LDF, said that a “speedy resolution” with “less red tape” was needed.
He voiced concerns that late payments were not being taken seriously enough by organisations of all shapes and sizes.
Ian Cole, of Siemens Financial Services, shared a similar view, and warned that the problems stemming from late payments often extended much further than temporary cash flow complications.
He said: “Delayed payments from customers can threaten SMEs’ ability to trade, stifle appetite for growth and recruitment and, in the worst cases, lead to insolvencies.
“As a consequence, leaving SMEs to cope with the problem is harming the economy as a whole.”