Billions wasted by late payments, survey finds

News Article - 09 October 2006
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Some £22 billion is wasted each year in late payments made by companies and the public sector, a survey has found.

Credit management firm Intrum Justitia discovered that companies take 54 days to pay their bills and the public sector takes 48, resulting in a bill of more than £20 billion from late payments.

According to Owen James, a director at Intrum Justitia, small and medium-sized enterprises suffered most from the effects of late payments because they were particularly vulnerable.

Mr James told Accountancy Age: "Small businesses are faced with a combination of large players who do not pay promptly and other small businesses that delay payment to protect their own cash flows."

The news comes as the Incomes Data Services (IDS) predicts that private sector salaries will rise at nearly double the rate of public sector pay, with an increase of between three and four per cent "or higher if inflation continues to rise and the economy remains strong", the IDS told the Financial Times.

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