Micro business owners in Sheffield have been found to have the biggest late payment problem in the UK, as the issue continues to hamper the progress of small firms across the country.
Just 29 per cent of invoices sent during 2016 by micro business owners in the south Yorkshire city were paid on time, whilst other North of England towns, such as Peterborough and Northampton, also fared poorly, with just 37 per cent and 38 per cent of micro business invoices paid on time in those areas respectively
Amongst the other areas of the UK where micro business owners struggled most to receive payment from clients last year were Belfast, the Northern Ireland capital, where just 42 per cent of invoices were paid on time, and Twickenham, in South West London, were 37 per cent of micro owners received prompt payment.
According to FreeAgent, Manchester is currently the best city in the country to be paid on time as a micro business owner, with 79 per cent of invoices having been paid on time in 2016.
Least affected UK areas for late payments
|City||Percentage of invoices paid on time to micro businesses|
|Manchester||79 per cent|
|Leeds||76 per cent|
|St Albans||67 per cent|
|Coventry||61 per cent|
|Nottingham||60 per cent|
FreeAgent CEO and co-founder, Ed Molyneux, said that the figures demonstrated how prevalent the late payment problem still was for micro companies across Britain. “Even in Manchester, there are still many businesses who aren’t being paid on time,” he added.
“We’re not just talking about clients taking an extra week or two to pay – this includes chronic late payers who sit on invoices for months, as well as those who just don’t pay at all.”
The latest research into the late payment problem analysed hundreds of thousands of invoices from FreeAgent’s customer base of more than 50,000 micro businesses. Last year, 3.15m invoices (worth more than £4.5bn) were sent via the platform, according to the data.
Molyneux added that it was now the government’s job to take further steps to tackle the late payment problem. He said that the appointment of a small business commissioner – who’s’ specific task it will be to address late payments – was long overdue. He also raised concerns over how effective the commissioner will actually be once he or she is appointed.
“This [appointment] process has dragged on for a considerable amount of time and I fear that whoever is appointed will have limited power to actually punish companies who routinely pay late, aside from just naming and shaming them,” he said.
“Micro-business owners need to get paid promptly to keep their cash flow healthy and most don’t have the luxury of being able to absorb a late – or non-payment in their accounts. We need to see a complete cultural shift when it comes to paying invoices, so that these types of smaller businesses are not put at risk.”
Read more on late payments:
- Margot James reaffirms government commitments to combat late payments
- Clamping down on late payments and supply chain bullies
- Micro firms hit disproportionately by late payments
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