UK businesses are owed £128bn in unpaid bills and invoices according to the latest research from business credit experts Creditsafe. Meaning that companies are losing an average of £1,341 in interest every month.
Manufacturing firms are the hardest hit with the average amount owed to them standing at a massive £95,182 at any one time. Wholesale, retail and trade are second in the league with £26,774 outstanding from customers and account holders on their books and construction firms owed an average of £21,884.
In terms of how widespread the problem is, 86% of manufacturing companies, 75% of construction companies and 66% of wholesale, retail and trade businesses in the UK are owed monies beyond the period outlined in their terms and conditions.
This all equates to £128bn in unpaid bills, which has a huge impact on UK business. For example, Creditsafe says that 1.3m companies have been unable to pay their bills on time because of late payments from customers. And a staggering 442,350 companies have been unable to meet tax obligations.
Most worryingly perhaps is the fact that almost 350,000 companies have been unable to pay employees on time, 115,000 companies have laid off staff because of it and more than 132,000 have actually been forced to cease trading for a time.
“The growth of the British economy and success of millions of businesses are being jeopardised by late payments,” said Creditsafe UK managing director Simon Camilleri. “Protecting cash flow throughout the economy is vital as so many businesses are independent. Creditsafe are calling on the Government to do more to protect businesses from the scourge of late or defaulted payments.”