The small and medium sized enterprises (SMEs) across the UK are currently owed a combined total of £67 billion in relation to unpaid invoices.
These figures are according to the Asset Based Finance Association (ABFA), whose research suggests that British SMEs are now typically having to wait longer for their invoices to be paid than at the height of the recession in 2009.
Non-payment of invoices is a major cause of frustration among SMEs and the ABFA’s latest figures suggest that the amounts owed in these circumstances has bee
n on the rise in recent years.
Across the country as whole, SMEs are now owed at least £67.4 billion in unpaid invoices, which represents an increase of 8% on the same figure in 2014 and a huge jump of 36% since 2011. However, the ABFA has said that the true figure of the amount owed to SMEs in the UK is likely to be much higher than the figure of £67.4 billion because its numbers are compiled only on the basis of information on the 180,000 SMEs that submit detailed annual accounts.
According to the organisation, the average length of time that an SME has to wait for its invoices to be paid currently stands at 72 days, a figure up from 61 days in 2009.
The ABFA, however, is keen to convey to British SME’s that their unpaid invoices can be business assets in themselves.
“The scale of unpaid invoices to Britain’s SMEs has become enormous, but there is no reason for it to become a barrier to investment and growth” – Jeff Longhurst, ABFA’s Chief Executive.
He continued- “Businesses need to recognise that their unpaid invoices are an asset. In many cases, they are the most valuable asset an SME has, and they can be the key to unlocking critical and affordable funding.”
Longhurst went on to say that invoice finance solutions are playing an increasingly important role in the management of SMEs throughout the country.
ABFA’s members include a diverse range of invoice finance companies whose services currently provide a collective total of around £9 billion in funding to British SMEs.
If your SME is struggling with unpaid invoices you are advised to contact the UK Debt Collection Bureau for free advice on the next steps to take.