UK businesses are owed more than £133 billion since the lockdown measures began in March, with the average business waiting on £148,917 for work that was completed before the lockdown.
The majority of businesses are also expecting to wait longer to receive payment in the future, with 50 per cent of firms expecting to wait between 14-30 days beyond the normal 45-day payment terms.
With lockdown measures now easing and many businesses returning to work in line with the COVID-secure guidance, cash flow will be a concern for many, with some businesses having no income for the past three months.
While pubs, hairdressers, hotels and other businesses in England will be allowed to reopen safely from 4 July, late payments could become a significant issue in the coming months.
According to the latest figures, around half (43 per cent) of those that applied for the Coronavirus Business Interruption Loan Scheme (CBILS) were successful, with the average loan being more than £200,000. But for those that were not successful, there could be an additional strain on cash flow and receiving outstanding payments.
However, businesses are optimistic about the demand for goods and services, with around half expecting to see an increase of 10 per cent in sales.
Late payments are a persistent problem for businesses, particularly small to medium-sized enterprises (SMEs), with the issue being exacerbated by the coronavirus pandemic, and factoring this into any financial planning for a return to work could help to mitigate any potential issues.
For help and advice, contact our expert team today.
Facts and figures from this blog can be found here.