A massive £18.6bn is the figure
put on outstanding payments owed to Britain’s small-to-medium
sized enterprises (SMEs) – a leap of £2.6bn in
the last year. That’s the main conclusion to come out
of new research commissioned by Bacs Payment Schemes Limited
(Bacs), the company behind Direct Debit and Bacs Direct Credit.
When
quizzed as part of Bacs’ annual business omnibus,
SME owners from around the country claimed fewer of them
were experiencing late payment problems than a year ago (59%
in 2006 versus 51% today). However, further probing from
Bacs about the value of outstanding money unearthed a bleaker
picture. Figures showed that the average amount owed to an
SME at any one time is £30,000 - an alarming figure
considering almost a third (29%) of those surveyed claimed
they could go bust if faced with overdue invoices of up to
just £20,000.
The not-for-profit industry body behind
Direct Debit and Bacs Direct Credit also found that almost
a fifth of SMEs
(19%) now employ a dedicated person to chase in late payments – losing
an average of 17 working days a year to this onerous task.
Figures also revealed some stark differences
in the regions, with SMEs from Greater London faring far
worse than their
counterparts in other areas. They are the most likely to
experience a problem with late payments – 65% versus
the national average of 51%. They are owed an average of £51,000
at any one time, that’s £21k over the national
figure ,and they are spending, on average, 38 days a year
chasing in late payments – that’s more than double
the amount of time spent by companies in any other region.
In
comparison, SMEs in the North East (including Yorkshire and
Humberside) are the least likely to experience problems – 42%
have issues with late payments at one time or another versus
the national average of 51%. And North West SMEs have the
best results when it comes to chasing in overdue invoices – 45%
have experienced late payments from customers from time to
time, far less than the national average, and they spend
an average of just 12 days a year chasing guilty suppliers.
Commenting Michael Chambers, managing director
of Bacs, said: “Our
latest business figures paint an interesting picture about
the culture of late payments across Great Britain – with
some surprising regional pockets of success, and failure.
But the most striking thing – at a national level – is
that the scale of late payments has grown in value yet again,
despite companies investing a significant amount of time
and money to secure the demise of the problem.
"Making the
decision to employ someone to chase in late payments is a
big step for any SME company – and it can be effective.
But it can also be time consuming and repetitive month-on-month
if the right tactics aren’t employed from the start.
British SMEs need to be much smarter about tackling late
payments and should use a range of solutions, including automated
payments, to stamp out the problem once and for all."
