UK small to medium-sized enterprises (SMEs) are chasing in excess of £50 billion in late payments, according to the latest research.
The study, led by digital business banking platform Tide, surveyed 1,000 UK SMEs, with the research finding that many SMEs are chasing five outstanding invoices at the same time.
The average amount owed is £8,500, with each firm spending 1.5 hours every day chasing the invoices.
Self-employed and freelance workers are also experiencing a significant amount of late payments being owed, with an average of four outstanding invoices at any one time, worth almost £1,000 per person. Firms with between 10 and 50 employees have an average of 7.5 invoices, with the average amount owed to them being £13,000.
According to the study, decision-makers and senior leaders at SMEs are spending 12 hours every week on unprofitable admin tasks, such as banking, expensive management and bookkeeping.
Research by the Federation of Small Businesses (FSB) also found that 50,000 SMEs closed in 2016 because of late payments.
Oliver Prill, CEO of Tide, said: “It has been known for a while now that late payments are crippling SMEs, with the government having tried a number of times to address the issue. It is however shocking to see exactly how much time SMEs, and particularly the self-employed, are wasting by having to chase clients to pay promptly.
“Cash flow is crucial for SMEs, and just a few late payments can tip them into danger of becoming insolvent.”