Association for Consultancy and Engineering survey finds time taken for small businesses to get paid has decreased by five days
Late payments for small business firms have improved over the past year, according to the Association for Consultancy and Engineering (ACE).
In a new survey of payment times, the ACE found that the amount of time it takes for small businesses to receive payments has decreased to 85 days, down from 90 in last year’s survey.
However, the overall average for all firms remained stable at 85 days.
The report also found that for smaller companies, private sector work accounted for 70% of revenue, but also took ten days longer to pay than the public sector.
The report also found that large and small companies had issues getting paid on time for around a third of all turnover.
Despite this, the survey found that on the whole, smaller companies generated higher revenues per £1 of employee cost than large firms.
ACE’s chief executive, Dr Nelson Ogunshakin, said: “Whilst it is positive news that the time it takes small companies to receive payment has shown some improvement, it remains concerning that little progress has been made more widely. This figure is still more than double the Government Fair Payment Charter, which has set a target of payment within 30 thirty days.”
“Cash flow is important for any businesses to operate efficiently and support growth. As such, prompt payment plays a vital role in helping companies to maintain the delicate balance between income and expenditure, and we would encourage all clients to bear this in mind when looking at their payment processes.”