New figures highlight a significant difference between how quickly firms in each part of the UK pay their invoices.
Hitachi looked at the impact that late payment was having on its clients and discovered that in the North East, only 21% of invoices are paid after 60 days, which is much lower than the UK average of 30%. In the Midlands, 40% of invoices were paid late, while the North West and Home Counties fared little better, with 38% not paid on time.
On average, each UK small and medium-sized enterprise (SME) is owed £30,000 by clients. That works out at £32bn across all sectors.
In May, during his first speech as business minister Sajid Javid said:
“You know as well as I what figures like that can do to the cash flow of small businesses. It’s enough to force a company into insolvency. We’ve not been blind to these issues.”
In 2008, 4,000 firms became insolvent. Many were profitable on paper, but late payment meant that they simply did not have sufficient cash flow to stay in business.
Firms can use late payment legislation to push for payment, but many do not do so, fearing losing business from big customers. Going down that route is also complex, time consuming and often involves paying legal fees.
At DJB, we can help with business cash flow problems by helping you to release cash tied up in your assets, thereby bridging the gap until you are paid.