Freelancers and micro-business owners throughout are suffering from late payments from clients, new research has revealed. Large businesses continue to pay suppliers late as late invoices payments continue to drive more small businesses into financial distress.
The new research from cloud accounting software company FreeAgent has revealed that UK-wide, just 52 per cent of invoices sent during 2017 were paid on time or within three days of their payment deadlines. A further 26 per cent of UK micro-businesses said that the longest they have had to wait to get paid by a client was three to six months, while 10 per cent has had a client who has never paid them at all.
Ed Molyneux, CEO and co-founder of FreeAgent, said: “While late payments are an issue across the UK economy as a whole, our research reveals just how widespread it is within the freelance and micro-business community.”
“Around half of the invoices sent by micro-businesses in the UK get paid late, and there are certain areas where the issue is considerably even worse. Even in Manchester, where late payment is least prevalent, there are still many businesses who aren’t being paid on time. Some of these late payments go way beyond a week or two, with some taking months to settle invoices, or even not paying at all.”
“Micro-business owners don’t have the luxury of being able to absorb late payments into their accounts – they need to get paid promptly to keep their cash flow healthy. While the government recognises the late payment problem, the reality is that the Small Business Commissioner has limited power to actually punish companies who routinely pay their invoices late, aside from just naming and shaming them. Late payments put freelancers and micro-businesses at significant risk, and we need stricter measures in place to tackle late payment culture.”