One in ten small and medium-sized enterprises (SMEs) believe that their experiences with late payments have worsened over the past year, a new study reveals.
The research, which was recently carried out by fintech company Crossflow Payments, suggests that new legislation introduced earlier this year to crack down on the so-called ‘late payments crisis’ has not inspired confidence in SMEs.
In April 2017, new legislation took effect which now requires large businesses to report on how quickly they pay their suppliers.
The rules have been introduced in a bid to shed light on ‘bad practice’, after research found that UK SMEs are owed an estimated £26.3bn in overdue payments.
But in late May, almost three quarters (73 per cent) of SME decision makers openly told Crossflow Payments that they believe the new legislation will have no impact whatsoever on the late payment problems they face.
The survey quizzed a total of 1,031 senior SME decision makers.
As many as 78 per cent of these respondents told the survey that they did not fully understand the new rules – suggesting that many SMEs would find it difficult to use them as leverage in a bid to chase unpaid invoices.
The Commercial Litigation team at Palmers Solicitors are able to advise on all kinds of business disputes, including late payments and debt recovery. For more information about any of our services, including our Commercial Debt Recovery Scheme, please contact us.