Invoice Finance Blog – Late payments continue to put pressure on SMEs

Late payment problems continue to put pressure on the majority of UK small and medium sized companies’ cash flow, with firms paying bills an average of 25.2 days late, research from Experian has revealed.

The statistics, which represent UK businesses payment times in the first quarter of 2011, shows that although the time taken to pay invoices has marginally reduced (from 25.7 days in Q4 2010), late payments still affect companies of all sizes.

Large firms (with 500 employees or more) take the longest to pay bills – 34 days, but many SMEs also fail to pay their invoices on time, with the average payment time just under 20 days overdue.

Late payments have a dramatic effect on cash flow and can hinder businesses’ growth strategies. Factoring Finance can put in place, products such as invoice finance – like factoring or invoice discounting – and/or debtor protection insurance which have an element of outsourced credit control for companies of all sizes in order to keep a close eye on accounts and ensure overdue bills are promptly chased.

The latest figures run counter to the desired actions of the governments Prompt Payment Code and further solidify the belief that little is being done to stop this late payment blight in the UK’s SME’s, at a time when the economy needs them the most.

If your business is suffering from customers paying bills late it is worth considering employing a credit insurance policy such as debtor insurance, which can safeguard your company against the risks associated with late payment and debtor failure.

If you have some questions on invoice finance or some concern about late payment problems simply get in touch with Factoring Finance for more details or a no obligation discussion. You can use the Online Enquiry Form on our contact page, the ‘Am I eligible’ tool in the top right hand corner of the same page or call 0151 632 0877 at your convenience.

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