Late payment 'an ongoing issue' for micro-firms

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Payment issues continue to affect the UK's small businesses

Micro-businesses across the UK continue to face difficulties in receiving payments from their customers - an issue that could be leading to many firms facing serious financial difficulties.

Research published by Intuit QuickBooks has shown that as much as £16.9 billion in outstanding payments remains owed to the UK's smallest firms of ten employees or less - a segment of industry that accounts for 96 per cent of all companies across the country.

The report found that almost one-third (32 per cent) of micro-companies have had to resort to taking out short-term loans or other credit agreements to make up for shortfalls in liquidity as a result of a failure of customers to make their payments on time.

Overall, it found that the average amount of time spent each year chasing outstanding invoices for this group accounted for 19 working days - a considerable outlay in terms of both manpower and wasted productivity.

What's more, this is an issue that business leaders feel could easily be avoided, especially as 93 per cent of respondents to the survey stated they would be happy to pay their own invoices immediately, but rarely ask their own customers to do the same.

Responding to the data, UK vice-president and managing director at Intuit Rich Preece stated: "This isn't just about late payments, it's about expecting and facilitating payments much more quickly, and the impact this can have on the millions of very small firms across the UK.

"There's major potential to dramatically improve micro businesses' cashflow and save valuable time by making it easier for their customers to pay."

Indeed, a focus on making it as easy as possible for customers to settle their debts with a business can be an important step in ensuring firms are on the right track towards growth, and it is therefore an area on which successful businesses will want to focus.