Tide has long known that the time spent chasing late payments is an issue for SMEs, but our latest research has revealed that SMEs across the country are chasing more than £50bn worth of late payments*.
We surveyed 1,000 CEOs, founders, directors and senior management staff at SMEs in December to analyse their use of time during their working day.
The study found that the average UK SME is chasing five outstanding invoices at any one time, amounting to an average of £8,500 being owed and 1.5 hours per day – or almost 900,000 hours in total, across all SMEs, per day – being used.
People who are self-employed and working alone have an average of four outstanding invoices at any one time, amounting to almost £1,000. They claim to spend one hour per day chasing up these invoices. Businesses with between 10 and 50 employees have an average of 7.5 invoices outstanding, amounting to over £13,000 being owed.
Businesses based in London have the roughest ride in terms of late payments, with businesses in the capital claiming to have an average of seven invoices outstanding, with over two hours per day spent chasing.
London is closely followed by Scotland, with businesses there having an average of six unpaid invoices, equating to an hour and a quarter per day spent asking for payment. Businesses in the South West have it best, waiting on three invoices to be paid.
Late payments are a significant issue for SMEs, with research from the Federation of Small Businesses in 2016 stating that 50,000 small businesses are put out of business annually by this behaviour, a £2.5bn hit to the UK economy**.
