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Small businesses losing £1.9bn a year on late payment

Published on 31 Mar 2010 under category: legal

Small firms in the UK are losing up to £1.9 billion a year on chasing late payments from customers, claims a new report.

Bibby Financial Services has reported that more than a third (35 per cent) of firms in the UK are finding that they are waiting much longer for customers to pay invoices than a year ago – with around 48,000 businesses finding themselves sending out invoices more than eleven times to defaulting customers.

Seven per cent of companies waste up to three working days or more per month contacting customers over late payment.

Edward Rimmer, Bibby Financial Services' UK chief executive, commented: "The UK business community has got to stem the tide. We cannot keep stalling payment and expect it to have no consequence.

"Across this nation, businesses are fighting for survival with sustaining a healthy cash flow one of the biggest challenges.

"We need to support one another and do everything possible not to succumb to the easy route of late payment as it can become a vicious circle."

The report follows on from a recent government pledge to pay 80 per cent of its invoices from small businesses within five days, which could reduce the average waiting time by ten days.

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