While this is an improvement for small businesses, the overall average for all firms remained stable at 85 days, however.
On average small companies reported that 1.6% of payments incurred recovery costs, knocking an average of 0.2% off company’s profit margins.
While private sector work accounted for 70% of revenue for smaller companies, these clients also took 10 days longer to pay on average than the public sector. For larger companies the average was 12 days longer.
Large and small companies experienced problems getting paid within contracted terms for approximately a third of all turnover.
Despite long payment terms, small companies continue to generate higher revenue per £1 of employee cost than large firms, the survey found. 85% of small firms performed better than the average of £1.50 for larger firms, demonstrating that they continue to hold significant potential to improve economic growth going forward.