Over £26bn in payments were made late last year according to recent statistics from Bacs; an increase of 40%. Small to medium enterprise businesses are those most badly hit, facing increasing problems receiving payments from larger companies.
The government have been taking steps to prevent this with changes to the Companies Act. Organisations now have to outline their payment policies to demonstrate if they are paying suppliers on time, but if this process happens in reality is another matter.
Even with a visual on this information this then surely poses a bigger problem for the supplier as they have to then decide if the contract opportunity is worth the possibility of delayed payments, when cash flow is critical.
A difficult time for all, and although it’s obvious as to why larger organisations are delaying payments many SME’s now going out of business due to issues such as these. This will only continue to reduce the supply pool – adding further to an already difficult situation.
