Almost half of small and medium-sized businesses have struggled with late payments in the last year, according to research by the Institute of Directors (IoD).
Of the 787 business leaders surveyed, 48% have faced issues with late payments since April 2017.
Almost a third (31%) said this was the result of an “excessively bureaucratic payments system” in the company being invoiced.
Others noted disparity between the practices of smaller and larger businesses, with 23% claiming larger firms in their supply chain used “grossly unfair” terms or practices.
Around one in three (30%) payments to small businesses are late and the average value of each payment is £6,142.
In December 2017, small business commissioner Paul Uppal launched a complaints handling service which was intended to help businesses resolve payment disputes.
However, only 1% of respondents to the IoD survey thought mediation by the small business commissioner would be the best way to address late payments.
Edwin Morgan, director of policy at the IoD, said:
“It is deeply disturbing that so many businesses have to struggle to claim the money they are owed.
“Chasing late payments can have a particularly damaging effect on small companies, sapping resources and hurting their productivity.”
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