UK small businesses now face £10bn in outstanding payments, forcing SMEs to write off £4.8bn in bad debt, according to Barclays Local Business’ annual Late Payments report.

The report reveals that on an average day small businesses across England and Wales are left £2,440 out of pocket as a result of suppliers’ or customers’ failure to pay up during the standard 30 day invoicing period. 

The figure is up £1.7bn on last year and has meant SMEs have lost out on £5bn over the past 12 months.

London and the North West firms are most likely to be affected by late payments, with 73% of those interviewed disclosing they had a problem.

John Davis, marketing director for Barclays Local Business, says: “Despite some recent positive economic signs, it’s concerning that late payments are on the rise. This is a serious issue for the businesses we talked to, around a third [32%] say it threatens their day-to-day survival.”

Angela Banks, manager at creative staffing firm Design Studio People in London, told Recruiter: “We have quite strict debt control. We are strict and stringent about checking all of our clients before we deal with them.

“It is more of a process for ensuring you have a reliable check before you engage with them.”

Ian Shaw, director at legal and IT recruiter Actis Recruitment in Salford near Manchester, says: “Because we are a small company, we tend to deal with established clients rather than ones we have not dealt with before.

“We are fortunate those clients have not gone bust on us. We do not do contract [recruitment]. In permanent recruitment, there is a rebate period and that is applicable if the invoice is paid within 14 days, so there is an incentive for clients to pay that straight away.”