Late payments cost UK economy £20bn a year
Companies take more than a week longer to pay invoices than in 1998 when the Late Payment Act was introduced
Poor payment practice is costing UK business £20bn a year, according to
research commisioned by payments group
Prompt Payer.
According to the Federation
of Small Business statistics, 1 in 4 businesses go insolvent due to invoices
being paid late. Data from credit ratings group Experian showed that companies
now take 8 days longer to pay invoices than they did when the Late Payments Act
was introduced in 1998.
UK Payment Index and
European
Commision figures have also discovered that at any given point, nearly 50%
of all invoices are overdue, resulting in thousands of businesses filing for
bankruptcy and a loss of 450,000 jobs each year.
Prompt Payer added: ‘Despite revisions to the Late Payment Act, little
improvement has been made and late payment continues to remain the biggest
threat to 35% of UK businesses today.’
Further reading:
Higginson: ‘Tesco pays on time’
Finance: SMEs spoilt for choice
Competition Commission probes retail
payments