It has been revealed that a shocking 13% of micro-businesses in the UK have waited 12 months or more to have their invoices paid, according to new research results released.
A Business survey conducted has found that almost half of companies with less than 10 employees have had to wait two months or more for payment of their invoices and almost 9 out of 10 have been paid later than their invoice terms stated.
This survey of 500 micro-businesses, conducted by YouGov (on behalf of tech company FreeAgent) discovered that around 30% of firms wait at least a month or more before chasing an overdue invoice with a surprising 28 % chasing payment within the first week after it was due. A meagre 14% of small companies said they had never been paid later than the due date.
Chris Spencer, Operations Chief at leading Commercial Debt Recovery firm Federal Management said of the results “Running a business can be difficult enough without the constant headache of chasing overdue accounts and invoices. In business it’s imperative you get paid quickly – late-paying clients cause major cash flow problems for some companies which in extreme cases can lead to the failure of the business.
Research shows that many UK micro-business owners face real problems when it comes to getting paid on time. We also found that many micro-business owners are waiting for months before they chase an unpaid invoice which is quite often to their own detriment.
Mr Spencer continued “We know that it can be awkward to chase clients and ask them for money, but if you don’t follow up with late payers from the moment that their invoice is overdue, then this can cause problems further down the line and may result in you not getting paid at all.”
Despite the upturn in the British Economy many UK Businesses continue to suffer cash flow issues simply down to late payment of invoices.