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Business growth hit hard by late payments

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Businesses in the US are suffering a cash flow crisis because of late payments, and there's a real worry it could get worse in some quarters.

A survey from Capgemini, looking at Fortune 1000 companies, revealed that many are letting outstanding IOUs pile up.

29 percent of those surveyed said delayed cash flow was putting the brakes on growing a business. 27 percent said that also hampered their ability to hire more staff, while 20 percent said revenues are directly affected.

Unsurprisingly, late payments have become more noticeable over the past 12 months along with  the global belt-tightening.  Almost half of those surveyed said there were more late payments in the last year.

Wages took a hit too. Because contracts were paid late, companies surveyed said they couldn't afford to give staff the bonuses they deserved. 

The problem isn't isolated. Bailiffs are doing a roaring trade in the UK, too - according to a survey of small to medium firms by industry payment body BACS, the UK saw late payments reach an all time high of £33.6 billion since it began recording information in 2007.

This figure also represents a swift increase in the amount owed to businesses over the past 12 months.   Further UK companies are likely to have to wait even longer than usual to get their hands on overdue payments as the average owed to each increased to £39,000.


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