Manufacturers owed £10 billion in late payments
1 min read
UK manufacturers were owed £10.3 billion in late payments in 2011 – up from £8.9 billion in 2010 – and most had to wait for two months for bills to be paid. That's the finding of research by BACS, the organisation behind Direct Debit.
The average amount owed to each firm was also up at £43,000 compared with 2010's figure of £38,000. More than half (55%) of those surveyed said they experience late payment and 15% admitted to being 'very worried' about overdue accounts.
The most common excuse is the invoice is awaiting authorisation (54%) or being processed by accounts (37%). The cliched response of 'the cheque's in the post' is still cited by many.
Mike Hutchinson (pictured), head of marketing at BACS, says the issue of late payments is damaging to manufacturing firms which are relying on good cash flow to keep going through the fragile post-recession recovery period: "The problem of late payment is clearly getting worse for SMEs in the manufacturing sector as the value owed is up by more than £1 billion on 2010's figures."
Across all sectors, late payments rose to £33.6bn, he added. "At a time when firms need to plan ahead for growth to ensure a strong cash flow, they are hanging on for payments which could have a serious impact on their business.
"We urge SMEs in the manufacturing sector to look at what payments can be automated to help them assert more control over their cash flow, and hopefully alleviate some of that stress on the business and its owner."
