Late payments endangering SMEs

Smaller businesses can wait up to five months for payment of their invoices, a poll conducted by credit firm Experian has discovered. The report supports the findings by direct debit company BACS earlier this year, which revealed that almost a third of SMEs could go bust if they were left £20,000 out of pocket. The average amount owed to small firms at any one time stands at £30,000. The problem is that small companies are always under commercial pressure to pay their own debts quickly or have services and goods refused. Despite the legislation to protect them, SMEs remain reluctant to pursue claims in case it affects future business.