Late payment to SMEs on rise

Small to medium enterprises (SMEs) are being hit by increasing delays in payment by bigger firms, according to an investigation.

The Forum of Private Business's (FPB) research found that 88% of SMEs questioned in its research said that larger firms were not paying them within contractually agreed time frames.

In addition to this, the research also revealed that 72% of respondents believe that the credit crunch is having a serious effect on their business.

Nick Palin, finance and administration director for the FPB, said: "The government should be doing more, both by paying on time itself and by implementing measures to tackle the problem without increasing the burden of legislation faced by small firms."

The FPB now says that it is working with the government to find a solution to the problem that does not require new legislation.

Under the Late Payment of Commercial Debts (Interest) Act 1998, SMEs have the statutory right to interest in the event of late payment.