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Published on Friday, June 08, 2012
It was also discovered that the average amount owed to SMEs at
the end of 2011 stood at £45,000 (up from £39,000 earlier in the
year), despite the number of SMEs reporting late payment
falling (down to 785,000 from
Bigger organisations are the least likely to pay on time, with 41% of SMEs stating that they are the 'worst offenders' compared to private companies, individuals, other SMEs and governmental departments.
Mike Hutchinson, Bacs, comments, "Our research highlights the challenges faced by thousands of SMEs chasing payments from customers and maintaining a healthy cash flow which is the life blood of any successful business".
Larger businesses need to fully understand the impact they have
on suppliers, and the rest of the supply chain, when they pay
suppliers past the agreed payment terms. Automating supplier
payments maintains control and
"reduces stress and the financial cost of chasing payments for business owners."
Hutchinson concludes, "Ultimately it is an issue for businesses of all sizes to address. Prompt payment is good not only for the individual businesses involved in any given transaction, but throughout the whole supply chain."
Philip King, Institute of Credit Management, comments, "Although disappointing, it is no surprise that the volume and value of late payments is rising" due to the economic climate and "larger companies must do more to pay their suppliers on time."