The UK’s small and medium-sized businesses are being stretched by customers failing to pay them on time, according to a survey from business body Market Finance.
Firms had to wait an average of 23 days to receive their money in 2019, the survey found, up from 12 days in 2018.
Industry groups such as the Federation of Small Businesses (FSB) have decried what they term the late payment crisis, which they say is hurting small businesses at an already challenging time.
Market Finance found that the professional and legal services sector suffered with late payment the most in 2019. Seven in ten invoices were paid late, up from 30 per cent in 2018.
Six in ten manufacturing invoices were paid late, while 50 per cent of retailers had to wait for their money.
Late payment practices improved for companies working in the utilities and energy sector with only a third of invoices being paid late in 2019 compared to two-thirds in 2018.
There was a marginal improvement in the number of invoices paid on time, however, with 39 per cent of invoices paid late in 2019, up from 43 per cent in 2018.
Bilal Mahmood, external relations director at Market Finance, said: “It’s great to see that fewer invoices were paid late in 2019 but worryingly, those that were paid late took twice as long.”
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He added: “Late payment practices harm business cash flow, hampers investment and, in extreme cases, can risk business solvency.”
Mahmood said watchdogs “need more bite” so they can better crack down on late payments.