By Marcus Leach
Calls for a special day to recognise the role played by small employers in the UK’s economy have intensified following new research showing that the smallest micro businesses are leading the way in tackling late payment.
The Forum of Private Business, Wanobe.com and The Business Woman’s Network have joined forces to campaign for a ‘micro business day’ dedicated to recognising the economic importance of UK firms employing fewer than 10 staff.
The campaign has gathered pace following new research from Experian covering the third quarter of 2011 which shows that, while average late payment time for all UK firms went up by almost one day, to 26.13 days, employers with one or two staff were able to limit the rise to just half a day — the smallest increase recorded during the period.
However, other micro businesses taking part in the survey were less successful. Those with between three and five employees saw average payments beyond agreed terms increase by more than a day to 23.01 days — with only medium-sized firms and large businesses in the 51—100, 101—500 and 500-plus employee categories faring worse.
In addition, Firms with 6—10 staff experienced average late payments of slightly less than one day.
“The jobs that will drive economic growth are expected to be created in micro businesses so it is important that we place the political spotlight squarely on them and make sure it stays there — that is why we are calling for a micro business day to highlight the crucial role played by the UK’s smaller businesses,” said Jane Bennett, Head of Campaigns at the Forum, which provides the secretariat to the All-party Parliamentary Micro Business Group.
“It is time for the Government to stop talking micro and thinking macro and instead focus on the real issues of the smallest businesses.
“Late payment is a huge issue, particularly for small businesses. While it is pleasing that the smallest micro businesses seem to be leading the way in minimising the problem, others are less able to do so - perhaps because employment law bureaucracy means they simply have less time to chase outstanding payments.”
David Noble, Managing Director of the online business knowledge market Wanobe.com said: “A major problem facing the UK’s micro businesses is how to chase money owed to them without upsetting a customer relationship — and possibly losing business as a result.
“It is dilemma micro businesses must solve every day and their creativity and perseverance in dealing with such issues, which enables them to survive and retain employees, is what makes them the real heroes in our marketplace.”
Mandie Holgate, of The Business Woman’ Network and a leading business coach, said: “Micro business owners aim to respect their suppliers and customers, appreciating the critical impact cash flow has on small businesses.
“They also aim to work in unison and aim to source locally, thereby supporting local economies and communities — a practice that could benefit from being copied on a larger scale, again showcasing the ways in which the micro businesses of the UK need to be turned to more and more as a resource for practical business solutions that work and will see us through these tough times.”
According to the Experian data, the North West of England is the worst region for late payment by far, with firms waiting an average of 36.72 days beyond their agreed terms.
Next is London (28.69 days), followed by Scotland (27.19 days), Yorkshire (26.65 days), the East of England (26.12 days), the East Midlands (25.72 days) and the West Midlands (25.50 days).
North East firms wait on average 24.42 days for payment beyond their agreed terms, followed by Wales (24.28 days), the South East (20.83 days), Northern Ireland (20.05) and the South West (18.18 days).
Sectors with the worst average payments made outside agreed terms are postal and telecommunications (46.62 days), leisure and hotels (35.91 days), food retailing (34.33 days).property (34.12 days) and textiles and clothing (30.50 days).
Industries with relatively better average late payment times include agriculture, forestry and fishing (12.27 days), oil (15.64 days), spirits, wine and tobacco (16.84 days), servicing and repairs (17.77 days) and insurance (19.78 days).
According to the payment body Bacs, small firms in the UK are owed approximately £24 billion in outstanding invoice payments.
Join us on