10 June 2009 | Jake Kanter
Transport and logistics firms are owed £727 million in late payments, according to the Barclays Late Payments report out this week.
The study of 750 small transport and logistics providers in the UK revealed that firms are on average £2,690 out of pocket as a result of customers failing to pay within 30 days.
It showed companies are forced to wait nearly two weeks beyond the 30-day terms for invoices to be settled. It also found firms wrote off an average of £1,000 a year in bad debt because customers failed to pay at all. Some 35 per cent of respondents said late payment was a threat to their survival.
Businesses have consistently suffered late payment as a result of the economic downturn, with many similar studies highlighting the issue. A survey of 5,000 businesses in Europe last month showed companies and public bodies only settled 50 per cent of invoices within 30 days (Web news, 13 May 2009).
More than half - 54 per cent - of the transport and logistics suppliers surveyed by Barclays said the problem would get worse in the next 12 months.
This is despite around 180 big companies signing up to the government's Prompt Payment Code in the past year (Web news, 14 May 2009).
The report also found 40 per cent of vendors had taken out loans because invoices were not settled on time. In addition, it revealed companies spend an average of 1.3 hours a day chasing delayed payments.
John Davis, marketing director of Barclays Local Business, said it was "concerning" late payment was on the rise. "The businesses that will survive and thrive during the downturn are taking late payments seriously," he added.