Research has revealed the shocking reality of how unpaid invoices are damaging SMEs in the UK. The study, carried out by software provider FreeAgent, showed that small businesses lost revenue to the tune of £1,804 on average last year due to unpaid invoices.
An amount of this size would barely register as a blip on the radar of larger firms, but smaller businesses have struggled to take the hit.
How unpaid invoices are damaging SME businesses in the UK
Business analyst Henry Morgan, who has discussed the findings on his finance blog this week, said: “Unpaid invoices are damaging UK SMEs and it’s sad to see. Many rely on that regular income to keep moving, however small, so to be constantly facing late or no payments at all from clients can grind everything to a halt”.
Thousands of small to medium-sized businesses closed for good last year alone for this very reason, and that has experts concerned. Morgan added: “It’s a sorry state of affairs when prosperous businesses hoping to make it are stopped in their tracks by something so trivial”.
“You cannot account for poor payers. My advice to those starting out who are concerned by how their cash flow could be affected by this issue is to contact an invoice finance provider”.
Morgan explained that an increasing number of businesses in the UK are turning to this service to counter the problems that late payments can bring.
“An invoice finance provider does not just assist cash flow by making a percentage of the invoice’s value available immediately, but it can also serve as protection against clients who cannot pay”.
“It’s a fantastic way to keep your business moving forward”.