Nearly half of small businesses in the UK are affected by late payments, with 15% struggling to maintain their day-to-day operations and continue trading due to unpaid invoices.
The average total of outstanding payments is £20,000. Of those businesses that have experienced problems due to late payments - representing 44% of the respondents to the survey, over half (58%) said that it impacts on their day-to-day cashflow management, while 17% said it has meant they have had to rein in necessary spending.
The figures come from the latest Close Brothers Business Barometer, a quarterly survey of business owners and managers, conducted by the invoice finance specialists.
CEO of Close Brothers Invoice Finance, David Thomson, said: 'This increasing debt burden is a worrying situation for small firms. Of the businesses we spoke to that are facing problems due to unpaid invoices, 44% say that they are owed more than £20,000.
'This is constricting their cashflow and the knock-on effect is that it prevents them from being able to pay their suppliers on time, thus creating a vicious cycle.'
The survey also revealed that 17% of firms in the UK spend more than ten hours a month chasing unpaid bills.