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NW SMEs owed twice as much in late payments as their southern counterparts

SMEs in the North of England are owed almost twice as much in late payments than their southern counterparts, new research shows.

According to the report by Bacs Payment Schemes, 59 per cent of North West SMEs are owed an average of £39,000 in unpaid invoices compared with 55 per cent of firms in the south that are have unsettled bills worth £23,000.

Small companies now have to wait almost eight working weeks before they see any cash, while 58 per cent of respondents said that large firms often ignore agreed payment terms and only pay up when they choose to.

Mike Hutchinson, head of marketing at Bacs, said that just under one million of the nation’s smaller businesses are facing a late payment burden.

This, he added, could have potentially serious implications for businesses.

“On top of that, our research shows that they can’t rely on their customers meeting payment terms which they have set in the first place.

“Waiting eight working weeks after a payment is due before receiving the money could be catastrophic for vulnerable companies, particularly at a time when the economy is struggling and cash flow is key,” Hutchinson stated.

The retail and distribution sector is suffering the most. Almost 60 per cent of those questioned said that they are being affected by late payments, with average outstanding payments of £43,000, totalling £12.3bn overdue for that sector alone.

Furthermore, when chasing overdue invoices, 18 per cent of SMEs have been told that the customer had either forgotten to pay or just hadn’t got round to settling the bill.

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