Friday, May 29, 2020

Three quarters of SMEs bite their tongues over chasing late payments in fear of losing customers

The Small Business Commissioner, Paul Uppal, and Growth Street, the business lender transforming the business overdraft, launched their collaborative whitepaper ‘Taking Notice of UK Business’ yesterday. The whitepaper follows a survey of UK SMEs on their experiences of unfair payment practices.

The key findings of the report include:

  • 75% of SMEs said they would fear taking action against a late payment at the risk of damaging their client relationships.
  • 43% of SMEs said they have experienced late payments for their goods or services from larger businesses.
  • 76% said that not getting paid at all for their work was a significant issue for their business.

Canvassing 500 UK SME decision-makers across the country, the survey asked key questions around late payments, standard payment terms and views on Open Banking.

The survey shows that 43% of SMEs had experienced late payments from larger businesses. Furthermore, nearly half of all medium sized businesses have been subject to late or otherwise unfair payment practices from large businesses (47%). Similarly, 38% of small businesses report late or unfair payments.

When it comes to factors that may make SME decision makers reluctant to act against unpaid invoices, fear of damaging client relationships was the greatest concern, with 77% registering at least some influence over whether they would act.

The second biggest concern was around damaging chances of getting paid at all, with 76% saying that may influence their taking acting in relation to unpaid invoices.

Most businesses surveyed had payment terms of up to 30 days (over 54%). Only 14% of SMEs said that the payment terms they had agreed and signed with their suppliers were greater than 61 days.

Paul Uppal, Small Business Commissioner:  “The key findings in this survey highlight that small businesses tolerate late and non-payment due to a fear of reprisal.

“The Government is building an environment in which small and medium-sized businesses can continue to prosper. Through my role, I am committed to keep the spotlight on this issue and instil confidence in the minds of small businesses. I will continue to tackle late payment and address the imbalance in market power between parties, promote transparency and encourage better payment practices through culture change.

Greg Carter, Growth Street CEO: “Every business should have the right to know when and if they will be paid. The fact that a third of all businesses have been subject to unfair payment practices is a shocking statistic – more needs to be done to educate SMEs about the options available and empower them to act against poor payment practices.

“This survey with Paul Uppal is part of Growth Street’s broader commitment to helping UK SMEs grow: one of the reasons we are transforming the overdraft for SMEs is to provide an alternative to invoice finance. However, people shouldn’t need to seek loans to cover unpaid invoices – they should have the support and knowledge that they will be paid on time, every time.”

Help us maintain our standards of journalism

Readers enjoy our news site but keeping our news up to date and authoritative, without charging readers to view the site is a challenge. Especially now with the Corona Virus measures affecting us all, as many clients have been severely affected and are naturally reducing their spend on advertisements. Given this lack of revenue stream we are calling on the generosity of our readers to help us fill that void and enable our journalists to continue delivering the news that you enjoy.

Unlike many other news sites, we don't have annoying pop ups or charge scandalous prices for events. We also produce printed magazines for each title and we make these freely available to read on line too, for your enjoyment. Often, people have asked why we don't make a charge for viewers to read these magazines and news stories but we feel that would adversely affect our readership/advertisers response rate. But with advertising revenues now severely affected we need your help. So, if you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs from just £31.50 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the current storm and continue in our quest to deliver quality journalism.

We value your readership and your support, as this enables us to continue to provide our regular daily news updates. We've been established over 30 years, during which we've lost count of the numerous recessions and financial meltdowns, and we intend to weather the storms caused by Covid-19. So, every reader contribution, however big or small, is invaluable in helping us to get through this. Please click here to help support your favourite news site/magazine.




Latest news

Channel 4 puts Leeds at centre of digital strategy

Channel 4 has this week unveiled plans for its Leeds-based in-house digital content studio, 4Studio, putting the city at the epicentre of its digital...

Bank cash sees biofuel supplier support NHS

A Barnsley-based biofuel supplier has secured six-figure funding to provide fuel to an NHS hospital during the continuing pandemic. The funding from HSBC UK will...

Pandemic sees business confidence plummet in Yorkshire

Business confidence in Yorkshire fell 12 points during May to a near-record low of -31%, according to the latest ‘Business Barometer’ from Lloyds Bank...

Harris CM begins contract to extend specialist engineering campus

Harris CM has started work on a contract to extend York College’s specialist motor vehicle and engineering campus. The contact will see the Yorkshire construction...

Gelder reveal its new ‘Can Do’ Commercial Division Leadership Team

The Gelder Group merged its Facilities Maintenance and Building and Major Contracts Divisions in 2019 to one ‘Commercial Division’ reporting in to Construction Director...

Safe working guidelines published for British businesses

BSI, the UK’s National Standards Body, has published new safe working guidelines to help businesses manage a safe return to work and reoccupation of...

Related news

Channel 4 puts Leeds at centre of digital strategy

Channel 4 has this week unveiled plans for its Leeds-based in-house digital content studio, 4Studio, putting the city at the epicentre of its digital...

Bank cash sees biofuel supplier support NHS

A Barnsley-based biofuel supplier has secured six-figure funding to provide fuel to an NHS hospital during the continuing pandemic. The funding from HSBC UK will...

Pandemic sees business confidence plummet in Yorkshire

Business confidence in Yorkshire fell 12 points during May to a near-record low of -31%, according to the latest ‘Business Barometer’ from Lloyds Bank...

Harris CM begins contract to extend specialist engineering campus

Harris CM has started work on a contract to extend York College’s specialist motor vehicle and engineering campus. The contact will see the Yorkshire construction...

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close