The UK’s so-called late payments crisis appears to be worsening for Britain’s small and medium-sized enterprises (SMEs), a new study suggests.
Previously, research from the Federation of Small Businesses (FSB) has suggested that as many as 50,000 SMEs have faced serious financial issues as a result of late payments, while separate research has found that businesses are spending an unprecedented amount of time and money chasing their private sector clients over unpaid invoices.
But a new study commissioned by the Electrical Contractor’s Association (ECA) in collaboration with the Building Engineering Services Association and Select has found that late payments are not solely a private sector problem.
In fact, it has revealed that almost two thirds (63 per cent) of SMEs are not being paid by public sector clients within the required 30 day time limit laid out by laws in England and Wales.
The survey, which quizzed SMEs in the engineering sector in relation to their late payment experiences in the second quarter (Q2) of 2017, found an eight per cent rise in the number of businesses encountering late payment problems.
Despite this, however, it also found that 81 per cent of engineering firms either enjoyed an increase in turnover or no changes in turnover, suggesting that late payment woes did not hit business profits in Q2.
Going into Q3, as many as 87 per cent of SMEs are expecting their turnover to either increase or remain steady, the report found.