Culture of Slow Payments Continues to Plague U.K. Businesses
Wednesday, October 25, 2017
Two thirds of United Kingdom SMEs believe there is a culture of slow payments in the U.K., with the problem particularly acute in London (73 percent), the South West (72 percent) and Northern Ireland (87 percent), according to the Close Brothers Business Barometer, a quarterly survey that questions over 900 UK SME owners and senior management across a range of sectors and regions.
“Late payments are a very real issue for SME business owners,” said Neil Davies, CEO, Close Brothers Asset Finance. “This is clearly a national issue that spans both regions and industries. For example, 78 percent of transport firms are affected by this issue, along with of 74 percent of manufacturing businesses and 73 percent of printers.”
The effects of late payments are multiple, ranging from damage to the supply chain and business reputation to impacting credit ratings and consequently the ability to access further funding.
One in four U.K. companies have been forced to seek legal advice because of slow payments, while in the Republic of Ireland the figure is significantly higher at 41 percent.
“In the sectors we serve the figures are, in most instances, higher than the national average,” Davies said. “Construction (30 percent), engineering (38 percent), manufacturing (37 percent) and transport (33 percent) all track higher than the rest of the U.K.”