Late payments reach record levels
November 4, 2011
According to figures released by payment company Bacs, the amount of money owed to small firms has reached a record three year high with the cash owed to companies by their customers standing at a staggering £33.6 billion an increase of 10 per cent on last year's record figure.
Just when we were hoping it wouldn't get any worse for small companies, it just has, says Luisa Grey, Director of Eazipay, one of the UKs leading Direct Debit processing companies, adding: It seems that the worst culprits are large organisations who are keeping their creditors waiting an average of 28 days longer than their payment terms before their invoices are settled.
The financial pressure coupled with the emotional stress can become intolerable with small companies being forced to slash their overheads in order to stay afloat even though there is nothing fundamentally wrong with their businesses. Its a reaction brought about purely by being paid late.
According to the data, SMEs are owed around £39,000 each and some are being kept waiting as long as two months before being paid which not only impacts on vital cash flow buy makes business planning a near impossibility.
The issue of late payments coupled with the banks reluctance to open their vaults means that small companies which really are the lifeblood of the economy are being squeezed unfairly, especially at a time of national and international economic uncertainty, adds Luisa.
NOTES TO EDITORS
About Eazipay Ltd
- Established in 2002 by local entrepreneurs Kathy and Ron Bradney, and their colleague, Luisa Grey, Eazipay Ltd has become one of the UKs fastest growing Direct Debit processing companies.
- Eazipay now provides regular Direct Debit services to over 650 companies in a wide range of market sectors throughout the UK, Europe and beyond.
- In March 2011, Eazipay recorded its best ever month for Direct Debit collections when £9.8 million worth of Direct Debits were processed on behalf of its clients.
- Eazipay was recently awarded Affiliate status from Bacs, the governing body for Direct Debit processing in the UK payments industry. The company is now a member of an exclusive group of 38 other Bacs Affiliates, which includes representatives from some of the UKs leading businesses, banks and building societies, as well as government organisations and banking technology providers.
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