Unpaid bills to SME businesses are now at the highest level (£35.3 billion) in almost five years, according to Bacs, with combined debts up by almost £2 billion compared to the first half of last year.
Bacs found that the average amount owed to small businesses stood at £45,000 at the end of 2011, up from £39,000 earlier in the year.
Additionally the average company is waiting 29.5 days longer than agreed payment terms to have their invoices settled, and that figure is also up, rising from 28 days reported in the first half of 2011. With large businesses insisting on payment terms of as much as 120 days, many suppliers could be waiting up to five months to be paid for work.
There’s an old saying that ‘a sale is not a sale until it is paid for’. This statement, amplified by the findings of the above research, serve to underline one of the biggest problems for SMEs – getting paid on time.
The quicker you can get paid in the current unforgiving environment, the better your cash flow and your business performance.