New data has revealed an increase in late payment times to UK small firms prompting calls for the introduction of tougher penalties to ensure businesses are paid on time.
The latest figures released by global small business platform Xero showed that payments to small businesses in September were made on average 8.2 days late. This represents the highest late payment time since August 2020, and inevitably places intense pressure on small firms’ ability to manage their cash flows and handle rising cost pressures.
Comparable figures for other nations show the late payment crisis is particularly acute in this country, with UK invoices tending to be paid significantly later than those in Australia (6.5 days) and New Zealand (6.2 days). This has led to growing calls for policymakers to take decisive action to tackle the problem and provide much-needed stability for small firms.
Xero, for instance, is urging the government to bring in new legislation to ensure hard-working small business owners are protected from problems caused by late payment. Specifically, the company has called for tougher penalties for ‘big businesses flouting agreed payment terms’, as well as the introduction of policies that require ‘more transparency in regulation and reporting around late payments.’