Many small firms are reluctant to chase up persistent later-payers for fear of damaging the relationship with customers and losing business, according to Bradford Chamber of Commerce.

Mike Cartwright, the chamber’s policy executive, said surveys had highlighted late payment of invoices by customers as one of the top three concerns of local businesses.

Although new legislation was available to help businesses chase up payments, many smaller firms were reluctant to use it in case it threatened their relationship with key customers. He said: “Although the Late Payment Act is now available for firms to use, some companies are reluctant to go down that route in case they damage their relationship with key clients and lose out on future business.

“Late payment is a real problem for smaller businesses, especially as they don’t feel they have the clout to chase payment from larger clients. It is regularly cited as among the top three concerns of our members running small firms.”

He was speaking after the publication of a survey which showed that Northern based small and medium sized firms are waiting 13 days longer than the national average to get paid.

The new figures from direct debit operator Bacs revealed that Northern SMEs have to wait 52.4 days beyond agreed terms to receive payment, above the national average of 39.2 days, and are owned a total of £6.2 billion, with firms owed an average of £25,000 each. Bacs’ said that 53 per cent of Northern small firms suffered from late payments and one in five employed a dedicated member of staff to process overdue invoices.

  • Read the full story in Tuesday's T&A