Late payments are a ‘growing challenge’ for 1 in 4 SMEs
Late payments are a growing issue for nearly a quarter of SMEs, according to a survey by the Institute of Chartered Accountants in England and Wales (ICAEW).
The survey of 1,000 ICAEW members found that 24% of small and medium-sized businesses experienced late payments as a greater challenge to their business performance than the same time last year.
Six out of nine sectors included in the survey reported late payments as a growing problem, while 20% of businesses overall say the same.
Those sectors included SMEs in property, business services, manufacturing and engineering, construction, retail and wholesale, and banking, finance and insurance.
Among the other challenges reported by businesses, regulatory requirements were the most significant, with around 45% of businesses saying these were a growing issue.
Meanwhile, customer demand and competition in the marketplace were both reported as challenges by more than a third of businesses.
Michael Izza, chief executive of the ICAEW, said government action on these issues "would help to restore confidence and momentum" for smaller businesses.
In June 2019, the Government announced a package of measures to prevent late payments, including new powers for the small business commissioner to prosecute larger businesses that pay late.
However, these are currently subject to consultation and have not been confirmed.
Get in touch to talk about managing cashflow.