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Sep 27, 2023

Late payment culture threatening SMEs

The ongoing late payment culture threatening the SME community has now caught the attention of Westminster, according to recent polling.

The survey from YouGov found that almost two-thirds (65%) of MPs support the introduction of a compulsory Prompt Payment Code (PPC) to protect cash flow for small businesses.

And with the majority of UK start-ups failing to survive at the current rate (60%), the government may be forced into swift action.

As it stands, the PPC remains voluntary, which means that only the code's signatories are required to pay the majority of invoices issued by SMEs within the first 30 days of receipt.

This news continues against a backdrop of struggling businesses in the UK.

Focusing on Scotland to understand the extent of the crisis - it is estimated that the nation's SMEs are currently owed £24,000 in late payments, according to a recent study from Intuit QuickBooks.

Another study, the SBS State of the Nation Roundtable Report, found that fewer than one-third of small firms have enough cash to keep their businesses afloat for more than six months, while 58% have not invested in their business over the past year due to economic instability.

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