Late payment a heavy price to pay for small businesses
IPSE, the Association of Independent Professionals and the Self Employed, has responded to new research from Bacs Payment Schemes Limited (Bacs), the company behind Direct Debit and Bacs Direct Credit in the UK, which found almost half the UK’s SMEs are regularly paid late. The average late payment debt in 2016 stands at £32,185, which equates to a substantial £26.3 billion.
IPSE Director of Policy, Simon McVicker, commented: “Too many of our smallest businesses are victims of the UK’s poor payment culture.
“Small businesses and the self-employed still have little power to resolve disagreements with larger clients or customers when paid late – which means the average debt they are owed continues to be at a staggering level. The balance of power in such disputes will always favour the larger party, at least until we see the UK’s Small Business Commissioner in action next year.
“Of course being paid late isn’t just a financial cost – it’s a personal one too. The last thing a self-employed person needs is to spend hours a week chasing unpaid invoices from clients. The emotional burden is heavy, and many will rely on being paid on time to cover their month’s rent or even keep their business afloat.”