Exclusive: Businesses’ troubles mount as late payment of invoices gets worse and worse
SMEs are suffering as late payment of their invoices has become a bigger issue in the past 12 months.
In fact, nearly one in four (24 per cent) SME owners and managers say delays in payment of invoices have got worse in the past year with 5 per cent saying it has become much worse.
Just 3 per cent of SMEs say issues with late payment have improved in the past year while 55 per cent say there has been no change, according to new research from finance company Premium Credit, shared with City A.M. this morning.
More than one in eight (13 per cent) of SMEs have found it harder to secure credit since the COVID-19 pandemic started.
That has prompted a switch in how some firms pay for insurance – around 12 per cent per cent say they now pay for all insurance monthly rather than in one lump sum as they did previously.
Owen Thomas, CSO at Premium Credit, said: “It is worrying to see that late payment of invoices has become a bigger issue for SMEs over the past year as it has a major impact on cashflow and a knock-on effect throughout business operations.”
“Premium finance is a very cost-effective way for businesses to buy insurance, and better manage their finances and cashflow by spreading payments. Our research shows nearly six out of ten SMEs use some form of credit to ensure they can still afford business-critical insurance,” Thomas concluded.