New research has revealed that late payments are causing more damage to the small business economy than almost any other factor.
The findings have been published as part of new research carried out by the leading accountancy regulator, the Institute of Chartered Accountants in England and Wales (ICAEW).
According to its latest Business Confidence Monitor (BCM), almost a quarter (24 per cent) of SMEs experience problems as a result of late payments.
The figures also suggest that the late payment culture is worsening, with one in five businesses suggesting that late payments are a greater challenge than a year ago.
Likewise, six out of nine major sectors – being property, business services, manufacturing & engineering, construction, retail & wholesale, and banking, finance & insurance – told researchers that late payments are a growing issue.
The study comes after recent research revealed that some 50,000 small business insolvencies can be attributed to late payments every year. The figures, published by the Federation of Small Businesses (FSB), suggest that late payments are costing the economy some £2.5 billion each year.
Commenting on the latest BCM, Michael Izza, ICAEW Chief Executive, reminded the policymakers that Brexit is not the only obstacle small businesses face.
“This feedback from our members, who advise businesses in every sector and level of the economy, reminds us that they face other challenges as well, many of which have little to do with Brexit – such as late payments and the regulatory burden,” said Mr Izza.
“Robust Government action on these issues could make a real difference to the business environment, especially for SMEs, and would help to restore confidence and momentum. That would go some way to unlocking the economy and ensuring it is in the best shape to face the challenges and opportunities of life outside the European Union.”