Small business are currently chasing more than £50bn of late payments, according to research.
Digital banking platform Tide revealed that the average UK SME is chasing five outstanding invoices at any one time, using up an astonishing 1.5 hours a day, with an average of £8,500 being owed.
If you are self-employed and working alone, you have an average of four outstanding invoices at any one time, amounting to almost £1,000.
And businesses with anything between 10 and 50 employees have an average of eight invoices outstanding, racking up £13,000 being owed on average.
Businesses in London have the toughest time in terms of late payments, with SMEs in the capital having an average of seven invoices outstanding, spending over two hours a day chasing.
London is closely followed by Scotland, with businesses there having an average of six unpaid invoices, eating up an hour and a quarter each day chasing.
The South West has the easiest time of it, with businesses there waiting on just three invoices to be paid.
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The late payments crisis appears to be getting worse with a quarter of SMEs reporting things are worse than a year ago. Although the government pledged to clamp down on late payments in its manifesto, ex-small business commissioner Paul Uppal – the man appointed by government to enforce action against persistent late payers – says he was pushed out last year, continually undermined by Whitehall and starved or resources.
In addition to wasting nearly two hours a day chasing late payments, SMEs spend nearly one third of their working day (30 per cent) on unprofitable financial administration such as bookkeeping, expense management and accountancy.
Oliver Prill, Tide’s chief executive, said: “It has been known for a while now that late payments are crippling SMEs, with the government having tried a number of times to address the issue.
“It is however shocking to see exactly how much time SMEs and particularly the self-employed are wasting by having to chase clients to pay promptly. Cash flow is crucial for SMEs, and just a few late payments can tip them into danger of becoming insolvent.”
Tide surveyed 1,000 chief executives and senior management staff at SMEs in December to analyse their use of time.