One in eight UK micro-business wait a year for payment

Will Green is news editor of Supply Management
14 July 2015

Some 13 per cent of micro-businesses in the UK have had to wait 12 months or more to get paid, according to research.

A poll found almost half of firms with fewer than 10 employees have waited two months or more for payment and almost nine in 10 have been paid late.

The survey of 500 micro-businesses, carried out by YouGov on behalf of technology company FreeAgent, found almost a third of firms would wait a month or more before chasing an overdue invoice with only 28 per cent chasing an invoice within the first week after it was due. Just 14 per cent said they had never been paid late.

Ed Molyneux, CEO and co-founder of FreeAgent, said: “When you’re running a business it’s really important to get paid quickly – late-paying clients can create major cash flow problems which in extreme cases can lead to the failure of your business.

“But our research shows that many UK micro-business owners face real problems when it comes to getting paid on time. We also found that many micro-business owners are waiting for months before they chase an unpaid invoice, and that’s really too long.

“We know that it can be awkward to chase clients and ask them for money, but if you don’t follow up with late payers from the moment that their invoice is overdue, they may not see the urgency in paying you. And that means you may be stuck waiting for months – or in extreme cases even years – to get paid what you’re owed.”

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