Small Business Matters | A Blog for UK Small Businesses

Video: Tips for succeeding in a recession

Pernille Brunn-Jensen, Managing Director Global Small Business at Intuit UK, discusses top tips for small business owners to survive the recession. Pernille responds to the question: *What step can small businesses take to help themselves?

Late payments continue to hurt small businesses

According to Barclays Local Business’ annual Late Payments report, there has been a 20 per cent rise in late payments, forcing UK small businesses to write off £4.8bn in debt. The figure is up £1.7bn on last year and has meant that small businesses have lost out on a staggering £5bn over the past 12 months. Furthermore, they are owed more than £10bn in outstanding payments on any given day due to suppliers or customers failing to pay on time.

Poor payment practices have long been a thorn in many a small business’ side but the report highlights just how widespread the problem is becoming. Nearly three million small businesses (around 60 per cent) have experienced problems with late payments, representing an additional 850,000 businesses compared to last year. While a rise in late payments is expected during an economic downturn, these figures are still worrying and inexcusable. Small businesses are trying their hardest to get by in the current recession but approximately a third of the organisations surveyed by Barclays (32 per cent) admitted that customers or suppliers failing to pay on time threatened their day-to-day survival. That is because payment is crucial to a company’s cash flow and if not received on time or promptly, it can have a significant effect on the functioning of that business.