One million small and medium sized enterprises in the UK are owed a staggering £36.4 billion, according to research by Bacs Payment Schemes.
The study found the average amount owed to each SME is £36,000, and over one third of them say that late payment of bills could tip them into bankruptcy.
The research, which was carried out in July, showed that around six out of ten UK SMEs suffer experience late payments.
The average UK SME now has to wait 43.4 days beyond payment terms for their invoices to be paid – northern businesses are waiting even longer, with an average delay of 46.8 days before bills are settled.
The impact of these delays is more than simply financial. Bacs’ research also uncovered a human toll. 18 per cent of executives surveyed said that they were anxious about the consequences of late payments on their business while a further eight per cent said overdue invoices left them very worried, constantly checking for payments because of the potential impact on the viability of their business and could affect jobs.
Mike Hutchinson from Bacs said: “As our research shows, this issue not only hits the business but owners are reporting how it puts them under great strain personally, which has further negative repercussions.
“We urge SMEs to look at taking control over their cash flow wherever they can by automating payments where possible to save valuable time and administration costs, and hopefully alleviate a little of the pressure on the business and its owner.”