Small businesses are spending up to 10% of their working day chasing late payments, according to research by Xero.
52% of surveyed businesses are concerned about unpaid invoices, while firms in London (14%) and Wales (12%) spend the most time chasing payments – up to 1.5 days and 1.3 days each month respectively.
Business sectors worst affected by late payments are HR (26%), IT (16%) and manufacturing (15%).
Customers also waiting for payments and a lack of consistency on payment terms were cited as the main reasons for dealing with late payments.
37% of firms reported low productivity as an effect of late payments and resulting cashflow problems, while losing money (25%) and creating work backlogs (20%) are other common results.
Emma Jones, Enterprise Nation founder, said:
“The late payment epidemic the UK is facing has to change so small business founders don’t spend so many hours chasing doubt and worrying about cashflow on the back of late payment.
“With small businesses making up a staggering 99.8% of the British economic engine, this is a critical issue to sort for the betterment of the UK economy as a whole.”