Research reveals the mental health cost of late payments

Late payments are hitting the mental health of small business owners, according to research published by Pay.UK, which runs the Bacs Direct Credit and Direct Debit payment services.

The research has found that ,ore than a quarter (26 per cent) of SME business owners stress about late payments even when they are not at work; 17 per cent say that payment delays undermine their own confidence in their ability to run a business and 16 per cent worry about the issue every working day.

Two thirds (66 per cent) report that late payments make running a business less enjoyable while almost one in ten (nine per cent) of business owners have considered accessing professional support to help with their anxieties over being paid late.

And that’s as more SMEs report being paid late (54 per cent) than at any time since 2015 (55 per cent), with a total late payments bill of £23 billion this year – up from £13 billion in 2018.

Paul Horlock, CEO of Pay.UK, said “Over the years, the late payment research has become an established barometer of SME financial health, and has offered an invaluable insight into the challenges faced by SMEs. For the first time this year the research has also looked at the human, as well as the business cost of late payments, and we hope that this can contribute to the wider debate regarding this important area.”

Late payment consequences which undermine the emotional wellbeing of SME owners include:

• paying their own suppliers late (24 per cent)
• relying on overdrafts (35 per cent)
• cutting their own salaries to keep cash in their business (24 per cent)
• difficulties paying their own staff on time (12 per cent)
• struggling to pay business bills (13 per cent).