Late payments a headache for SMEs

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The financial stability of the region’s small and medium-sized business community is being put at risk by corporates that are using their size to secure unworkable payment terms, according to new research from Bibby Financial Services.

The survey of 1,000 SMEs found that 38 per cent of owners and managers in Yorkshire feel they have had no choice but to extend payment terms to larger customers as they fear losing valuable contracts. Five per cent of SMEs have had such a bad experience with customer late payment that they have reluctantly taken their case to the small claims court. A further 10 per cent have had to employ a debt collection agency or simply write off and absorb debts due to the escalating cost and time involved in pursuing payment, according to the survey, conducted by Bibby Financial Services and One Poll.