Provided by accounting software company, Xero, the report identifies ‘cashflow red flags’ for small businesses, alongside recommendations on avoiding late payments.

With inflation at 9.9%, late payments cost small businesses £684m annually, with many being paid 5.8 days late on average.

Late payments affected nearly half (48%) of small businesses, with 12% of invoices paid more than a month after they were due.

Expenses for businesses increased by 18% due to supply chain disruptions, commodity price shocks and general inflation.