AUTUMN 2023 LATE PAYMENT Late payment of invoices is on the rise and putting small businesses in a precarious position A report by the Federation of Small Businesses shows that the majority of small firms in the UK experienced late payments in every quarter of 2022. One in four small businesses also reported that late payments had got worse quarter on quarter, according to Time is Money, published by the FSB in March 2023. The report highlights that, in 2022: Taking action to address late payment is more vital than ever in the current economic climate 52% of small businesses had experienced late payments in the previous three months 25% reported an increase in late payments Small businesses that experienced an increase in late payments were more likely to apply for credit (17% compared with 9% of those that did not experience an increase) 62% of the public feel that a business should be paid within a week 55% of the public would support more controls to prevent businesses paying other businesses late. The government is looking at the problem with its Prompt Payment and Cashflow reviews but taking action to address late payment is more vital than ever in the current economic climate. Since 2020, the number of small businesses and self-employed in The voluntary the UK has contracted by half a million and with smaller firms Prompt Payment generally having much lower cash reserves than their larger Code states that a small counterparts, the risk is that late payment will cause this business supplier should number to rise. expect 95 per cent of its invoices to be paid within 30 days. Previous FSB research found that 50,000 business closures could have been avoided each year if late payments had been made on time and as promised. Clamping down on late payment would, therefore, provide a massive boost to the economy. FSB members can access help with chasing late payments on the FSB website. Credit: Karen Woolley, development manager, Federation of Small Businesses Image: iStock.com / Dmitry Kovalchuk Anonymous Hotline For further information, please contact your local Trading Standards Service For up-to-date news stories and information, follow us on 0300 303 2636 Is your sector being undermined by unscrupulous traders operating outside the law? Report them via Trading Standards Anonymous Hotline or online and help level the playing field for honest businesses.