Businesses can’t get their hands on £266bn because firms they supply won’t pay them on time
It’s suggested businesses are experiencing a “Brexit payment crunch”, with one in 10 having witnessed worsened payment terms since the EU referendum
UK small businesses are being prevented from accessing £266bn, that is rightfully theirs, because the firms they supply aren’t paying them on time – according to a report by Crossflow Payments and YouGov.
The survey of 1,031 small business decision makers revealed that 15% of all small firm turnover was subject to late payment in 2016 – with 23% of respondents declaring they don’t normally have their invoices settled on time.
Of these businesses, 55% indicate that this stretches on average to ten days or more beyond their payment terms.
The impact of unsteady cashflow is far reaching for enterprises, with the inability to rely on fluid transactions hindering the long-term growth plans of many.
If all invoices were settled subject to the contract terms, 22% of those surveyed said they would increase their marketing and sales budgets, 17% said they would hire more staff, while 17% said they would increase the wages of existing employees.
Of those who indicated they would hire more staff, 63% said they would hire up to five additional team members – the equivalent to the creation of 3.4 million additional jobs in the UK.
It’s suggested that businesses are experiencing a “Brexit payment crunch”, with 10% of those surveyed saying they’ve witnessed worsened payment terms since the EU referendum last June.
Indeed, 31% of respondents have expressed concern at the potential impact of Brexit negotiations on their business over the next year, with 20% worried about currency fluctuation.
Tony Duggan, CEO of Crossflow Payments, said:
“Brexit is increasing the issue of late payments and reducing investment by small businesses at a time when the UK faces economic uncertainty.
“Delays in receiving payment promptly from customers is acting as handbrake on businesses, preventing them from making key investment decisions for the future, and ultimately stunting growth. In 2017, it should no longer be the case that businesses face such hurdles.”
Struggling with late payments? Read this guide and get paid what you’re owed!