“SMEs are the engine of the UK economy, making up the majority of the UK’s private sector, so it’s great to see the survey results today suggest they are outperforming expectations this quarter and feel more optimistic after what’s been a whirlwind six months. But there are still challenging times ahead and the latest data from Dun & Bradstreet suggests that payment performance is worsening as the UK falls into a recession, which could be bad news for smaller businesses.
“Our trade payment data shows the percentage of bills paid on time has dropped since March, from a UK-wide average of 47.2% to 42.6%, signalling a worsening trend. Late payments critically affect the health of a business; UK companies spend 56.4 million hours looking for overdue payments and a survey commissioned by Dun & Bradstreet found that nearly half of SME respondents felt that overdue payments put their business at risk of failure.
“With the Government’s furlough scheme concluding and the end of the Brexit transition period getting closer, it’s a crucial time for SMEs to have full visibility of their business relationships to effectively manage their cash flow and assess the effect of the pandemic on their future growth. By using data and predictive analytics to gain a detailed understanding of the previous payment behaviour of customers and a view of future performance, businesses can mitigate the potential impact that late payments can have on their cash flow and plan accordingly.”
Edward Thorne, UK Managing Director at data and analytics firm, Dun & Bradstreet