30% of small firms in late-payments struggle

Around one in three small businesses in the UK have seen late payments increase in recent months, according to a new poll.

In a study of 1,271 business owners by the Federation of Small Businesses (FSB), 30% said they had been chasing overdue invoices over the last three months, with a further 8% experiencing other forms of poor payment practice.

As a result, 8% of respondents said late payments currently threaten their organisation, which would equate to around 400,000 firms in the UK.

The FSB published their figures alongside its small business index measure of confidence, which dropped by 8.5 in Q4 2020, down from 16.4 in Q3.

A seven-year high of 78% of business owners said costs were rising, particularly for inputs and fuel, while 74% of exporting firms said international sales fell flat over the last quarter.

Mike Cherry, chairman at the FSB, said:
"The small business community diminished in size over the past year and, unless action is taken now to tackle the challenges it faces, history is set to repeat itself.

"After another frustrating festive season, small firms are facing a fresh wave of admin for importers and exporters."

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