New research led by cloud software provider Xero reveals that the average small British business is owed almost £25,000 in late payments.
The research found that more than three quarters (78 per cent) of UK small and medium-sized enterprises (SMEs) were owed money outside of the pre-agreed payment terms.
As a result, it is estimated that the SME economy is effectively being forced to deal with an average deficit of £141 billion as a direct result of the so-called late payments crisis.
Xero discovered that on average, small businesses were being forced to wait 39.67 days for invoices to be paid, with the average SME owed approximately £24,841. In some cases, businesses were being forced to wait as long as 64 days to receive payment.
It also found that certain small business sectors were more likely to encounter problems with unpaid invoices than others.
Figures indicated that firms in the wholesale sector were typically owed the most, at £42,989. This was followed closely by administration and support businesses (£40,662), transport, postal and warehouse firms (£31,555) and public sector and safety businesses (£31,541).
From the research findings, it was highlighted that more needs to be done to address the problem after separate research found that approximately 50,000 businesses in the UK fail every single year due to cash flow issues.