Small and medium sized businesses in the UK transport and logistics sector already struggling to cope with the effects of the economic downturn are owed £727 million on any given day because of suppliers and customers failing to pay on time, according to Barclays Local Business annual Late Payments report.
On a typical day transport businesses across England and Wales are £2,690 out of pocket as a result of suppliers or customers failing to pay during the standard 30 day invoicing period. This total figure has resulted in these SMEs losing nearly £271 million over the last twelve months due to non-payments – an average of £1,000 per business.
John Davis, marketing director for Barclays Local Business said: “Despite some recent positive economic signs, it’s concerning that late payments are on the rise. This is a serious issue for the transport and logistics businesses we talked to – over a third [35 per cent] say it threatens their day-to-day survival.
Firms typically have to wait almost a fortnight (13.7 days) after the invoice due date before they get paid.
Davis said: “The businesses that will survive and thrive during the downturn are taking late payments seriously. We’ve seen a massive take-up of our in-house credit management service. Credit checking services are a powerful tool for deciding who to do business with, and who will pay on time.”
The report also found that 40 per cent of transport and logistics businesses have borrowed money (loan or overdraft) to improve cash flow as a result of being paid late and firms spend on average 1.3 hours a day chasing late payments.