Late payments 'threat to small firms' survival'

05/03/2008

The problems faced by small British companies when their clients fail to pay for goods or services on time present a significant threat to their survival, new research has suggested.

A recent study by Barclays found that almost a third of all small firms believe that the issue of late payment is critical to the success or otherwise of their enterprise.

Many businesses turn to factoring or invoice discounting to offset some of these cashflow concerns, but around 60 per cent of the small firms polled by Barclays said they had experienced problems with late payments at some stage.

Reflecting on the research, John Davis, marketing director for Barclays Local Business, commented: "Chasing up late payments is a massive drain on small organisations, which can be particularly damaging in a challenging economic environment."

A report from Alliance & Leicester last week suggested that a majority of small and medium-sized business bosses in the UK are confused about how the upcoming budget might affect their taxes.