According to new research by Lloyds TSB Commercial Finance, almost a third of SMEs in Yorkshire are experiencing cashflow problems, with over half of these firms attributing this to late payment.
The data is taken from the bank’s bi-annual Business in Britain survey, which questioned over 1,700 firms across the country in a variety of sectors about issues affecting them.
The research shows an increase in the number of firms experiencing cashflow difficulties in the last six months. The latest results show that 30 per cent of firms had problems with their cashflow, compared to 26 per cent in January 2013.
Of those SMEs experiencing cashflow difficulties, over half (60 per cent) attribute these problems to late payment. The number of firms attributing cashflow problems to late payment has fallen slightly from 56 per cent six months previously.
However, late payment is still the single largest cause of cashflow problems for these firms.
Mike Scowen, regional director for Lloyds TSB Commercial Finance in Yorkshire, said:
“Our research shows that almost a third of SMEs in Yorkshire suffer from poor cashflow. This figure has increased on the previous six months.
“What’s even more striking is that late payment remains the number one cause of poor cashflow for small and medium sized firms in the region.
“Firms can help to ensure they are less likely to encounter late payments by setting out clear payment terms with customers, and carrying out background checks.
“For many firms, invoice finance can also help them manage the payment gaps, allowing firms to borrow against the value of current invoices.”