Unpaid invoices are often a source of major cash flow issues for UK businesses, especially SMEs, and the news that the number of unpaid UK business invoices has increased by 23% is a sure sign that companies are struggling.
That figure comes from AI platform provider, Sidetrade, and their new tracker which has revealed, rather unsurprisingly, that unpaid invoices have increased since lockdown measures went into effect.
Both B2B and B2C companies have been affected by the rise in unpaid invoices and as well as the UK, various other European countries have also seen an increase.
For example, unpaid invoices have shot up 26% in the Netherlands, 44% in Belgium, 52% in Spain, 56% in France and 80% in Italy.
The damaging effect of unpaid invoices
Unpaid invoices can have a dramatic impact on the cash flow of a company and its ability to pay its own invoices. This can cause financial hardship which, if left unmanaged, could have serious implications for businesses. And the problem has got worse since the coronavirus pandemic began.
Insolvency is often an unfortunate result of unpaid invoices and one UK report argues a fifth of SMEs in the UK will collapse due to a lack of cash because of Covid-19. Research by the Federation of Small Business (FSB) says 50,000 businesses a year go under because of delayed payments.
Help for small businesses
The government has introduced a range of schemes to help UK businesses overcome the struggles brought on by the coronavirus epidemic, such as the Bounce Back Loans scheme, the Job Retention scheme, the Coronavirus Business Interruption Loan Scheme, scrapping business rates and various other business grants and VAT deferrals.
However, many small businesses are still struggling to see a way through. Unpaid invoices are a worry for any company and if you’re looking for free, no obligation advice we can help.
As Licensed Insolvency Practitioners, we’ve helped many small businesses across a range of sectors who have been struggling with cash flow issues and mounting debt due to unpaid invoices. If you’d like to talk to someone about your concerns, contact us at Clarke Bell.