A new study revealed that small and medium enterprises (SMEs) are continuing to suffer from over late payments of invoices, with up to 28% of respondents saying that their late payment problems have worsened in the past year.
The study, conducted by insurance financier Premium Credit, also found that 7% of respondents said that the late payment problems they are facing have become much worse. Only 3% said that their issues have eased, while 50% said that there were no changes.
These figures are higher than what Premium Credit found last year; research then found 24% said that it had worsened, while 5% said it had become much worse.
Another problem facing SMEs is access to credit. The study found around one in six to be struggling to access credit since the cost-of-living crisis. It’s a higher figure than last year, when 13% reported the same issue.
The Premium Credit study also found other worries for SMEs, one of which was funding rising wage and salary demands. Around one in four said wage inflation will be an issue in the year ahead, while 8% have told staff that they cannot afford wages. That said, around one in three said that they have already boosted wages and salaries.
Rising energy bills were also a challenge, with 14% of SMEs saying that they plan to cut running costs including wages in the year ahead so they can afford energy bills. On the other side of the downsizing spectrum, 7% say that they will cut staff entirely. There are also those planning to pass on the additional costs to customers, with 23% revealing that they are planning on doing so.
Premium Credit chief sales officer Owen Thomas said that late payment of invoices is a growing issue for SMEs, and that the research points to it becoming a bigger problem with a major impact on cash flow and operations.
“Premium finance is a very cost-effective way for businesses to buy insurance, and better manage their finances and cash flow by spreading payments. Our research shows more than half of SMEs use some form of credit to ensure they can still afford business-critical insurance,” Thomas said.
Elsewhere in the firm, Premium Credit also announced the appointment of Mark Morley as new operations director.
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