Half of UK businesses are paying suppliers later than agreed terms
Almost one in two business owners have admitted to paying suppliers later than the agreed terms, new survey findings have shown.
According to research from e-invoicing firm Tungsten Network and the Institute of Finance and Management (IOFM), 47 per cent of businessesfail tofulfilat least one in ten of their supplier payments after the agreed date typically between 30 and 60 days.
Additionally, justfive per cent of companies paid all invoices on time, whileone in 12 were failing to monitor supply chain practices altogether.
Britain’s late payment problem has emerged as one of the biggest constraintsof small business growth in recent years. The Federation of Small Businesses (FSB) predicted that if small companies received every payment on time in 2016, profit growth for each firm would be on average 2.6 per cent higher representing an extra 4.8bn in economic value.
The latest research arrives as the Department for Business, Energy and Industrial Strategy (BEIS) introduces payment reporting legislation for large businesses guilty of so-called ‘supply chain bullying, while the government’s small business commissioner was appointed inoctoberwith a mandate to address the problem.
Read more:?Premier League suppliers chase 1.3m in overdue payments from top football clubs
Researchers also asked businesses why they were failing to pay suppliers on time, and identified the five most common causes of late supplier payments:
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.