The average tradesperson is owed £6,210 in late payments and is chasing seven outstanding invoices, new research suggests.
Four in five tradespeople are owed money, the survey by Direct Line Business Insurance found.
A third of those owed money are chasing invoices of up to £2,500 while 9 per cent are owed more than £25,000.
Outstanding work: Tradespeople are battling overdue invoices worth an average £6,210
Almost three-quarters of tradespeople are chasing multiple outstanding payments, with an average of seven invoices, and one in seven are currently chasing 10 or more payments.
Small businesses have been quietly battling late payments, with the issue only worsening since the cost of living crisis.
Research by the Federation of Small Businesses trade body last year found that if late payments had been made on time, 50,000 business closures could be avoided each year.
Outstanding invoices frequently lead to cash flow problems for tohse already stretched thanks to higher energy and labour costs.
The definition of prompt payment for a small business suppliers, as per the Prompt Payment Code (PPC), is to pay 95 per cent of invoices from small businesses with fewer than 50 employees within 30 days.
However, the code is voluntary and FSB research found that in every quarter in 2022, most small businesses experienced late payments.
Plenty of businesses are flouting the current rules and the problem only seems to be getting worse.
Direct Line’s survey found that half of tradespeople have seen a rise in the number of customers disputing invoices, and a further 42 per cent are chasing more late payments than they were last year.
One in five tradespeople say they worry about the time spent chasing payments distracts from doing their job, while the same number are concerned about failing to cover personal expenses.
Some 15 per cent of tradespeople say it has had a negative impact on their mental health, with a third saying it makes them feel anxious.
Alison Traboulsi, of Direct Line, said: ‘Late payments can quickly become a big problem for small and independent businesses, leaving them unable to cover personal and business expenses, resulting in cash flow problems, stress and legal headaches.
‘Pursuing late payments is time consuming and eats into the time that could be spent working or with family and friends.’
Industry leaders have long called for more to be done about late payments. The Government recently announced plans to tackle the ‘scourge’ of late payments.
It said it will consult on new laws to hold larger firms to account, which will require them to include payment reporting in their annual reports.
The Department of Business and Trade said it would also step up enforcement of the existing reporting regulations.
Had trouble with late payments? Email editor@thisismoney.co.uk with LATE PAYMENTS in the subject line
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