61% of SME invoices unpaid within debtor period

New research from Amicus Commercial Finance has found that more than six out of 10 invoices (61%) issued by UK SMEs remain unpaid within the debtor day period.

The lender found that 70% of firms rely on getting paid during their debtor day period to avoid a shortage of working capital.

The research also found one in six SME invoices remained unpaid after 90 days, with 7% of these not settled after six months.

Amicus Commercial Finance pointed out that firms with 50 to 249 employees were worst affected by delayed payments, with 24% of invoices remaining unpaid after their debtor day period or not at all.

“Invoice payment terms are all too often ignored and for small firms this can put their cash flow under intolerable pressure, particularly when late payers are also large customers,” said John Wilde, managing director of Amicus Commercial Finance.

“For business owners with healthy sales, the frustration of being forced to take out business loans or extend their overdraft to avoid becoming insolvent can be overwhelming.”

As a result of payment delays, Amicus Commercial Finance found that more SMEs were using invoice finance to secure reliable cash flow, with 19% planning to use it in the future.

John concluded by adding: “Given this, it’s understandable that small firms are increasingly turning to invoice finance as a way of converting unpaid debts into instant working capital. 

“Here at Amicus Commercial Finance, we combine deep sector experience with a high-touch personal service and cutting-edge technology to make the process as straightforward and efficient as possible.”