Nearly half of all UK small and medium-sized enterprises (SMEs) are being paid late, a report has revealed.
According to research from Bacs, the average late payment debt now stands at £32,185.
This represents a deficit of approximately £26.3 billion across the 47 per cent of SMEs that say customers and clients consistently stray beyond agreed payment terms.
The researchers found that late payments had forced just less than a third of SMEs who had experienced delays to pay their own suppliers late.
And to add to the misery, around 12 per cent said that late payments impact on their ability to pay their own staff on time, while 20 per cent have difficulty paying business bills such as energy, rates, and rent.
In an attempt to plug the debt, 29 per cent of SMEs will rely on costly overdrafts to make up cash-flow, and one in five SME directors say that they are forced to make personal salary sacrifices in order to keep cash moving in the business.
It further says that a third of those who experience late payments are being kept waiting at least one month beyond their stated payment terms, with a quarter saying that this can extend to more than 60 days beyond agreed terms.
Mike Hutchinson, of Bacs, said: “These figures clearly show the human cost that late payments have on SME business owners. Very large figures sometimes obscure the personal impact and sacrifice that many small to medium size business owners have to bear in silence.
“Our figures show that a large proportion of SME directors have to use their overdrafts to supplement cash flow, with around 20 per cent of small company directors paying themselves less in order to keep their businesses afloat.”