Small businesses are owed on average £6,142 mostly by larger firms not paying them for goods and services on time. For more than 10 years we’ve been highlighting the impact of late payment, supply-chain bullying (suppliers are forced by larger firms to cut their prices), retrospective discounting (larger firms forcing a discount of an already agreed price) and paying-to-stay (smaller companies pay larger firms to remain a supplier).
Our research shows 37% have run into cash flow difficulties, 30% have been forced to use an overdraft and 20% cite a slowdown in profit growth. If all payments were made on time 50,000 more businesses could be kept open whilst the UK economy would receive a £2.5 billion boost.
Protect small businesses by lobbying the Government for stricter enforcement of the Prompt Payment Code. Signatories must pay suppliers within a maximum of 60 days, unless in exceptional circumstances.