British SMEs unpaid invoices total £67bn*
That’s 14% of their annual turnover
And the scary thing is this was back in 2015… the total of unpaid invoices will be way over £70bn by now!
These figures come from research by the Asset Based Finance Association (ABFA). The body representing asset based finance in the UK and the Republic of Ireland.
In their article they also state the £67.4 billion figure is likely to be conservative. It only reflects the invoices of 180,000 SMEs that reported detailed accounts.
More recently, Labour leader Jeremy Corbyn accused some of Britain’s biggest firms of late payment to the tune of £26bn a year. This, he states, was driving 50,000 small firms out of business.
“Cash is king for any business” he continued. “And big companies are managing their cash by borrowing, interest free, from their suppliers.”
If Labour win the 2017 election they may consider fining late payers. As a result companies bidding for public sector contracts would be required to pay suppliers within 30 days.
There are interesting times ahead, but for UK SMEs cash flow is still their lifeline and Debt Collection Agencies still have a part to play in keeping them alive.
* Private non-financial businesses with a turnover of £25 million or under. Source: Analysis of Companies House data by the ABFA.