SMEs ‘owed £33.6bn in late payments’

Small and medium-sized enterprises (SMEs) are owed a record £33.6bn in late payments, according to new research by payment company Bacs.

Bacs said the figure – a rise of 10% over the last year – is the highest since records began in 2007.

SMEs are owed an average of £39,000, and are waiting up to two months to get paid, claims the report.

It added that half of all UK SMEs – 861,000 firms – are currently experiencing late payments.

Mike Hutchinson, head of marketing at Bacs, said: “The issue of late payment is continuing to get worse for SMEs in the UK at a time when they need to be able to plan ahead for growth and ensure a strong cash flow.”

The worst offenders for paying late, according to the research, are large companies which are behind 48% of SME late payment debt, followed by public/private companies at 20%.

Government and not-for-profit organisations are among the best payers, with just 9% of SMEs experiencing overdue payments from this quarter.

The hardest hit sector is retail and distribution which is owed £16.6bn.