May 2011 | Angeline Albert
corporations have the worst record for late payments to their small suppliers
in the UK, according to a survey of SMEs.
conducted by BDRC Continental on behalf of automated payment system Bacs showed a third (33
per cent) of SMEs believe big private sector firms – those with turnover of
more than £1 million – are the worst at settling their bills on time.
survey of 471 senior finance decision makers and owners of UK SMEs found 27 per
cent thought no one single group – individuals, public or private organisations
– performed worse than another in terms of payment.
18 per cent of those surveyed blamed SMEs (excluding sole traders). Ten per
cent surveyed blamed sole traders, and 6 per cent said government and not-for-profit
organisations were the worst culprits. The remainder gave other responses.
the survey did note the public sector and not-for-profit organisations have
improved their performance, paying more of their bills on time. The number of
SMEs suffering late payment from these organisations almost halved from 11 per
cent to 6 per cent in the second half of 2010.
the overall picture was that 53 per cent of UK SMEs were paid late, a larger
number than the 45 per cent recorded in June 2010. Small firms have to wait an
average of 39 days beyond agreed payment terms – although this is the same as
the last survey, it is an increase of nearly eight days since June 2009 – and
have a total of £24 billion outstanding. Of the £24 billion owed to SMEs, £11
billion is owed by large businesses.
SMEs spend an average of 3.4 hours a week chasing money, losing 157.5 million
hours collectively each year.
Hutchinson, head of marketing at Bacs, said in a statement: “Late payment
remains a big problem for British SMEs with billions overdue against bills,
causing small businesses to use up millions of man hours in chasing invoice