SME’s are avoiding taking Debt Recovery action and chasing non payment a report has revealed. Small Business Commissioner Paul Uppal and Commercial Finance Lender Growth Street launched a collaborative survey, asking SME’s about their experience of non payment of business invoices.
The report found that a shocking 75% of Small Businesses and Medium Enterprises are fearful of taking action against late payment of invoices for fear of tarnishing their client relationships.
43% of SME’s claim that they have endured late payments from larger companies and 76% that they were constantly fearful of not getting paid at all which presents a significant issue for the running of any business.
The report was based upon a survey conducted amongst 500 SME key decision makers across the UK and the survey also asked questions about Business owners views on Open Banking and payment terms.
“The key findings in this survey highlight that small businesses tolerate late and non-payment due to the fear of reprisal” said Paul Uppal, Small Business Commissioner.
“The government is building an environment in which small and medium sized businesses can continue to prosper” he added
Greg Carter who is the CEO of Growth Street commented “Every business should have the right to know when and if they will be paid. The fact that a third of all businesses have been subject to unfair payment practices is a shocking statistic – more needs to be done to educate SMEs about the options available and empower them to act against poor payment practices”
The fact is that many SME’s go out of Business every year and procrastination can be a key factor in not taking action when a Small Business goes unpaid. Many SME’s have such tight cash flows that they do not allow for the non payment of goods or services
Chris Spencer of Leading B2B Debt Collection specialists Federal Management “It is imperative that SME’s take positive action when owed money and especially when promises of payment have not been kept.”
“Everyday we speak to Small Business owners who are reluctant to take action for fear of losing future custom. We always point out that no business should want customers who don’t want to pay and no Small Business has ever lost a customer simply because they were required to pay what is rightfully owed”