New research carried out by the Institute of Directors (IoD) has found that almost half (48 per cent) of small and medium-sized enterprises (SMEs) have been adversely affected by the UK’s so-called late payments crisis.
The survey, which quizzed 787 small businesses across various sectors, found that a similar number had experienced ‘recent issues’ with late payments, while 30 per cent said that they found the UK’s ‘excessively bureaucratic payment system’ frustrating.
A further 20 per cent said that larger firms had a tendency to use ‘grossly unfair’ terms and conditions, while the vast majority of respondents said that the new complaints handling procedure introduced in line with the appointment of the Small Business Commissioner last year had done little to alleviate the problem.
David Watt, of the IoD, branded the news “unacceptable” and said that legislative changes were imminently needed in order to address the “power balance” and better protect the UK’s small businesses.
“Chasing late payments can have a particularly damaging effect on our SMEs, and in some cases, it can be so bad that the SME is forced to fold due to a backlog of unpaid invoices,” he said.
In recent days, separate research carried out by cloud accounting provider Xero has revealed that almost half (52 per cent) of invoices tracked via its systems were paid late in 2017.
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.