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Late payments put SMEs and jobs at risk

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3 weeks 3 days ago - 3 weeks 3 days ago #4359 by j.salmon@cpa.co.uk
 Late payments put SMEs and jobs at risk

New research has warned of the impact of late payments on SMEs, saying the issue could see a number of firms struggle to survive after the coronavirus crisis

.A survey from Penny Freedom shows that two thirds UK SMEs have at least one late payment on their books, with an average value of £15,370, while a YouGov poll of SMEs found that 62% regularly experience late payments and 62% spend time each week chasing overdue invoices.With six million small businesses in the UK that means up to four million businesses are  struggling to get paid for products and services they’ve provided.

Late payments force those  businesses affected to live from hand to mouth,  rather than be able to  make longer-term plans for growth and expansion. As a result long term investment is suspended or over-looked. This has long term affects on growth and profitability.

The time, energy and resources sucked up by late payments causes significant damage, and sucks up resources that could otherwise have been used productively  growing the business.

There is no doubt that the pandemic has made this dire cash flow situation worse, with obstacles to trade, staffing issues, shutdowns, increased levels of debt and reduced cash-flows.

A report from the European Commission also shows that in the UK, 30% of businesses indicated that late payments had links to subsequent redundancies, compared to 35% of businesses in Germany, 28% in Spain and 25% in France.Late payers must also appreciate the risk they are causing to themselves.

By holding back payments from their suppliers, they are damaging those suppliers prospects and means their key allies may fall behind competitors in innovation and growth to their operations. And should their suppliers cease trading because of late payments, this can lead to severe challenges and delays to the late payers themselves as they have to find new suppliers for those products and services for their own business.

The message is as clear as ever that late payments can cause critical damage to the UK economy and hold back the UK's 6 million small businesses who feel the impact hardest.

Credit insurer Euler Hermes says up to 15 per cent of the UK’s SMEs are rated ‘fragile’ and risk insolvency during the next four years as Covid-19 state support schemes are withdrawn.

The UK is at a cross roads!We can either see 2022 as a year when SMEs can bounce back and thrive! Growing and driving a UK economic recovery and seizing the global opportunities before us.

Or 2022 can be the year when SMEs struggle as support measures are withdrawn and as a result the UK economy  gets trapped in a spiral of stagnation, low growth and business failure?

How we tackle late payments will be key to the answer!

Are you struggling because of late payments?

Are you unable to pay overheads on time?

Do you face difficulties paying staff salaries? 

Are you forced to be reliant on external financing to make up the gap in your cashflow caused by unpaid invoices?

With rising interest rates and emergency covid funding coming to an end, it is vital that that the issue of late payments is addressed.

The Credit Protection Association has been tackling late payments for over 100 years.

To find out how we can help you,  just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email This email address is being protected from spambots. You need JavaScript enabled to view it.

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