European businesses saw almost £300 billion of late payments last year as late payment culture has been shown to be a continent-wide issue afflicting small businesses and SMEs, according to new research. This was a 7% rise on the previous year’s figures, the survey by Swedish credit management services group Intrum Justitia showed. The survey asked almost 10,000 companies across 29 different countries about how late payments have affected them, with companies said to be most at risk from late payments in Greece, Cyprus, Hungary and Portugal. But, despite companies being least at risk in Germany, 30% of businesses based there still expect to encounter more risks due to late payments in 2012, up from 21% last year. Just under half of businesses had cut expenditure on innovation and were planning for no growth in the upcoming months.
Late payments in the UK
Many surveys over the past few years focussing on UK enterprise have shown how late payments have hit such companies hard by severely hindering cashflow and stunting growth plans. A European Union (EU) wide initiative, implemented in March, requires bills to be settled inside 30 days in the public sector and 60 days in the private sector, which may have helped businesses. But power is still overwhelmingly in the hands of big businesses, according to Forum of Private Business (FPB) spokesman Robert Downes. "You have big business trying to renegotiate the terms of invoices anyway ... companies don't like to say no for fear of losing that lucrative contract," Downes explained.