This compares to the UK average of 51%.

The joint study by payments authority Pay.UK and Europe’s largest credit management membership body the Chartered Institute of Credit Management (CICM) was carried out at the end of 2020, and showed not only that UK SMEs are owed billions, but also, that they are paying out billions themselves just to collect their debts.

Almost a fifth (18%) of those waiting on funds spent more than £500 per month chasing payments in 2020, adding up to a hefty £5 billion total bill for the UK’s smaller businesses – magnifying the effects of a pandemic and the subsequent economic downturn.

Three-quarters of those experiencing past due payments receive funds one month or more over agreed terms, and 27% are even waiting longer than two months.

As a third of these businesses must subsequently rely on bank finance, delaying funds for work completed just adds to the total debt, and therefore pressure, felt by SMEs in the UK; contributing to the cash flow problems already pushed to breaking point by a pandemic.

This issue, although affecting everyone, is particularly problematic for the countless new businesses formed in 2020, which need as much support as possible in order to succeed.

Lynne Darcey Quigley, founder & CEO of cloud-based credit management platform Know-it, commented: “This research has highlighted the ongoing struggle many businesses are facing in managing cash flow, and key to that is overdue payments. SMEs are particularly vulnerable and have been significantly impacted by the crisis anyhow, so this is just adding fuel to the fire: magnifying economic insecurity, and further jeopardising long-term economic security”.

“Unfortunately, the data highlights an increasing challenge when it comes to late payments. High consumer and business confidence has resulted from a successful vaccine rollout and excess high street consumer spending. However, any economic damage will have a lasting hangover, with many SMEs still fearing their long-term survival.”