Late payment issues continue to plague small firms

It suggests that more small firms have been chasing overdue payments in the last 18 months than the year before, when it recorded that 42% of invoices were paid late. 

The report reveals the nationwide lockdown for the COVID-19 pandemic has also wreaked havoc with income for small businesses. The number of invoices submitted by small firms and freelancers fell by a third between April and June 2020. 

This tallies with a report by McKinsey, which found that 80% of small business owners experienced declining revenues during the lockdown, with overdue payments of existing invoices threatening to disrupt business operations. 

Daren Moore, Group Commerical Director at TaxAssist Accountants, said: “It’s especially important that payments are made on time as failure to do so remains one of the biggest challenges faced by small businesses and the self-employed, and it is disappointing that nothing has been done to address the issue. 

“A number of these late payments stretch for weeks, with some invoices taking months to be paid. 

“It is important to remember that the owners of small businesses struggle to make up any shortfalls resulting from late payments so need to be paid on time so they can keep on top of their cash flow. 

“During these very challenging times, it is vital that small businesses are protected and supported, which is why we would like to see the Government take steps to introduce new legislation and significant penalties to put an end to late payment for good.” 

If your small business is experiencing issues with late payment, you don’t have to chase down outstanding invoices alone. 

We work with several specialist debt recovery agents who can provide professional and impartial advice, as well as management of individual invoices or your entire sales ledger. 

Our recommended agents take a careful, measured approach to recovering your debts, operating with skilled mediation and professionalism to maintain business relationships you may have worked hard to cultivate through the years. 

If unpaid invoices are becoming an ever-greater problem for your small business’ cash flow, we can help you choose the best online software so that you can keep track of your finances and any amounts owed in real time. For more information on our debt recovery services, call our friendly and experienced team today on 0203 4577 500 or drop us a line using our online enquiry form. 

Date published 14 Sep 2020 | Last updated 13 Feb 2024