Micro businesses bear the brunt of late payments

Micro businesses bear the brunt of late payments

Recent research has shown that micro businesses are bearing the brunt of late payments, with just 52 per cent of the invoices they issue being paid on time.

The research was based on data from 50,000 users of a prominent cloud accounting software provider.

Meanwhile, related research has found that a quarter of micro businesses are having to wait between three and six months to receive payments owed to them. A further 10 per cent report that they have clients who have never paid them.

When asked whether the Government should legislate to make it easier for micro businesses to recover funds from late payers, 70 per cent of respondents agreed.

Last year, the Government appointed a Small Business Commissioner, in a bid to to mediate disputes between SMEs and large companies that regularly pay their suppliers late.

New legislation is also being introduced which will enable SMEs to borrow a percentage of what they are owed by customers, with third-party financiers being allowed to lend to SMEs against outstanding invoices, in a bid to alleviate cash flow problems.