The total cost of late payment to UK businesses stands at almost £50 billion, according to a report from payments processor Bacs.
Large corporations are getting off lightly, with just £6.7 billion owed to them at any one time; in contrast, SMEs with fewer than 250 employees are shouldering the bulk of the burden at a total of £39.4 billion.
Together, these figures make an estimated total late payment debt of £46.1 billion.
Unsurprisingly, the average sums involved are much higher for the largest firms, who are owed nearly £1 million each.
But the risk factor is greater among SMEs, a quarter of which believe they would be driven bankrupt if the average late payment debt of £38,186 grew to £50,000 or more.
Overall, three fifths of SMEs are currently having problems with late payments, Bacs found, and this has knock-on problems in other parts of their business.
For instance, a quarter of companies are devoting more than ten man-hours per week to chasing late payments, and many are incurring overdraft fees and admin charges while waiting for payments to be made.
This places a total of £9.16 billion per year on top of the total already listed above – pushing the total impact of late payments well beyond the £50 billion threshold.
Mike Hutchinson of Bacs comments: “Despite the positive signs emerging about the financial state of the nation as a whole and the fact that we are thankfully moving out of recession, SMEs – which everyone agrees are the drivers of a successful economy – are being held back because of the increasing pressures of late payments.”