UKs Micro-businesses owed 60% more in late payments than the last year


New research has revealed late payments are continuing to have a significant impact on UK small businesses – with the smallest businesses being some of the worst hit.

Overall, the research by Intuit QuickBooks shows that small and medium-sized businesses with at least one overdue invoice were owed £21,356 in late payments on average in September – almost two thirds of the average SMEs typical monthly turnover.

The research also found that the average amount owed to SMBs in late payments has risen 11% year-on-year, up from £19,224 in September 2020, as the challenges experienced during recent lockdowns continue to have a significant impact. Almost two thirds of the invoiced amount owed to small businesses was overdue in September.

Micro-businesses hit hardest by late payments

The research found that micro-businesses (those with turnover of between £1k – £19k) are some of the worst-hit by late payments from customers and clients – and that this is getting worse.

Micro-businesses are owed considerably more compared to last quarter, with the average amount owed rising 26% in September to £2,400, from £1,900 in May 2021. Over the last year the gap has grown considerably, with the average amount owed rising 60% from £1,500 in September 2020.

Two fifths (41%) of micro-businesses’ invoices due in September were still overdue at the time of reporting. As a result, the smallest businesses are looking to speed up payments by tightening their payment deadline terms. Close to half of micro-businesses now require instant payment, and this has been steadily on the rise throughout 2021.

Harry Pill, Founder of Fresh Cut Video, said: “We are still feeling the impact of the pandemic when it comes to late payments, particularly in dealing with clients in the hospitality and entertainment sector – which has been under particular pressure.

“It’s a tough situation for us, as we’re sympathetic to their plight and don’t want to be chasing them and adding interest. On the other hand, we have done the work and paid for the staff and expenses involved, yet haven’t seen a penny back. We don’t have many options for dealing with late payments, and in the worst-case scenario may have to write it off. Service providers like my company need as much help as possible, especially as we also battle to recover from the impact of the pandemic.”

Chris Evans, VP and UK Country Manager at Intuit QuickBooks, says: “It is concerning to see that late payments are worsening for the smallest businesses. With tighter profit margins and limited cashflow, these businesses will be the most heavily impacted by unpaid invoices. Many micro-businesses are reducing their payment terms to try to combat the problem but it appears this is not having the expected effect.


Like it? Share with your friends!

What's Your Reaction?

hate hate
0
hate
confused confused
0
confused
fail fail
0
fail
fun fun
0
fun
geeky geeky
0
geeky
love love
0
love
lol lol
0
lol
omg omg
0
omg
win win
0
win
Administrator

0 Comments

Your email address will not be published.

Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Poll
Voting to make decisions or determine opinions
Story
Formatted Text with Embeds and Visuals
List
The Classic Internet Listicles
Countdown
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Meme
Upload your own images to make custom memes
Video
Youtube and Vimeo Embeds
Audio
Soundcloud or Mixcloud Embeds
Image
Photo or GIF
Gif
GIF format