Small and medium-sized businesses (SMEs) are waiting to be paid on average £59,013 each for work undertaken before lockdown, finds a business survey.
What’s more, company owners spent, on average, two weeks chasing an invoice payment that eventually was never paid because the customer became insolvent.
Risktech business Nimbla surveyed 12,000 UK SMEs and found that £2.2bn in revenue (for goods and services provided during lockdown) has been lost because customers fell into administration. This number could increase dramatically over the course of the next year, Nimbla said.
More than a third (38%) of SMEs surveyed reported that they are still waiting to be paid an average of £59,013 for work they completed before the lockdown. A fifth (21%) of these believe they will never recover the full amount, losing on average £24,903 because those customers have gone into administration. Looking at the bigger picture, this is worth £2.2bn in revenue across all SMEs (with outstanding payments) that will not be realised.
Flemming Bengtsen, CEO at Nimbla, said: “The impact the lockdown has had on SMEs, who are the heart and soul of the UK economy, is astonishing. Many have survived several attacks during the pandemic and, now, knowing they won’t get paid for the work they did is another huge body blow. There could be more bad news on the horizon for smaller businesses as high street chains face difficulties and potential insolvencies.”
