Small business owners are trapped in a late payment “merry-go-round”, squeezing suppliers for payment after being forced to accept extended payment terms for large customers.
A third of 1,000 companies interviewed by Bibby Financial Services said they had been forced to accept extended payment terms from customers in the past 12 months. As a result, 36 per cent said they were asking suppliers to wait longer for invoices to be settled.
About a fifth of those asked said they offered payment terms beyond 60 days as a matter of course, while 39 per cent said they typically had to wait at least a month beyond agreed payment terms to get money owed.
The European Late Payment Directive, to be introduced in March 2013, which will cap the maximum payment period at 60 days, is aimed at getting companies to clean up their act.
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