Businesses are reporting that delays in being paid are getting longer, according to a recent study, which looked at the finances of more than 7,500 firms.
Business finance supermarket, Funding Options, said suppliers now have to wait over 42 days on average for invoices to be paid – which represents an increase from an average of just over 40 days five years ago.
Data was obtained from Companies House which records payment information from more than 7,500 small and medium sized businesses.
Conrad Ford, CEO of Funding Options, said: “A single late payment can be an issue even for larger and more successful firms, and worsening delays could create more insolvencies.
Luke Morgan, a Partner who specialises in providing commercial litigation and dispute advice to businesses, said: “Late payment disputes cause misery for any commercial organisation but for small businesses, who are often operating on a very tight cash flow, late or missed payments can often mean the difference between survival and ceasing trading.
“The fact that the situation appears to be getting worse rather than better is particularly worrying and our advice to anyone affected is to seek prompt legal advice.
“Palmers offers a Commercial Debt Recovery Scheme to help businesses manage the recovery of their debts and to keep legal costs proportionate.
“Often a strongly worded solicitor’s letter is all that is needed to recover the outstanding payment but where this fails mediation and other alternative dispute resolution (ADR) procedures can be effective in recovering outstanding business debts. As a last resort, formal recovery action can also be taken.”
For support with business disputes and alternative dispute resolution as well as legal advice on debt recovery, please contact us.