tomato pay: late payments threaten survival of UK SMEs
Late payments are threatening the survival of small businesses across the UK, according to research by QR code payment and invoicing app, tomato pay.
The company surveyed 2,007 Brits and 500 senior decision makers in soletrader, small and medium sized businesses.
It discovered that 84% of small businesses suffer from late payments. One in eight wait more than 60 days on average for an invoice to be paid, while one in 50 have to wait more than 90 days.
For 92% of small business owners, this is having a negative impact on either their business, their personal life, or both, with more than a third saying it causes cash flow issues and stress and 16% saying they end up receiving late payment charges themselves.
As a result, 33% of small business owners are forced to pay themselves late, or not at all, while 17% have to pay employees late.
For one in four small businesses, the impact of late payments is limiting their businesses’ ability to grow, while one in five are worried their business won’t survive purely because invoices are not being paid when they’re due.
When asked what would help discourage late payments, 54% of small business owners said they would be happy to offer their customers discounts for paying on time or early while 69% would like an invoicing software solution that sends reminders to customers that payment is due.
tomato pay’s Founder and CEO Nicholas Heller says: “On average, small businesses issue 122 invoices every month - that is a whole lot of admin.”
“Then, when you consider the fact so many are paid late - which causes stress, cash flow issues and jeopardises the business’ survival - it is clear to see why the process of creating and issuing invoices can be so frustrating for small business owners.”
“They just want to get paid on time - that shouldn’t be too much to ask.”
