New data released by Bacs Payment Schemes has shown the level of outstanding debt owed to SMEs in the UK has reached a high of £35.5bn – an increase of £2bn since the previous researched data was released with the average amount owed to SMEs across the UK standing at £45,000 each at the end of 2011, an increase of£6,000 from earlier in the year.

Although the number of SMEs experiencing late payment has fallen (down to 785,000 from 861,000), the combined debt has increased.  Furthermore, businesses are waiting longer for invoices to be settled. In the second half of 2011, SMEs said they were waiting on average 29.6 days longer than agreed payment terms, an increase over the 28-day delay reported in the first half of 2011.

Yet this behavior by companies owing money is counterproductive, as we have explained before. Not only does it put supplier relationships at risk, but it also does little to help the paying company’s capital. Perhaps impending EU late payment legislation will help to address this business practice?  In the meantime, here’s an alternative approach to payment that can pay dividends:  http://www.dofonline.co.uk/content/view/6021/116/