SMALL and medium-sized firms in Yorkshire are waiting an average of 35 days beyond agreed payment terms for customers to settle their bills, a survey has revealed.

The study by Bacs Payment Schemes Ltd, the organisation behind Direct Debit, said the figure was an improvement of 1.4 days on the time SMEs in the region were waiting in June, 2009, when the average stood at 36.4 days.

But it said late payers were still contributing to considerable cash flow issues for many businesses.

Michael Chambers, managing director of Bacs, said: “Small businesses rely on receiving payments on time so that they can maintain cash flow and ensure the business can run on a day-to-day basis.

“Our research highlights the continued widespread nature and real impact of the late payment problem, which was affecting 236,000 SMEs in the north in December last year.”

Large companies were the biggest late payment culprits, according to 38% of SMEs polled.

However, 16% of respondents pointed the finger at fellow SMEs – with a further 13% blaming sole traders.

Some 4% cited not-for-profit organisations and government bodies as the worst payers – suggesting that a pledge made in the 2010 Budget for government departments to pay 80% of invoices within five days rather than the usual 30 will pose a challenge to achieve.