LARGE companies are squeezing the lifeblood out of the Yorkshire economy by failing to pay their suppliers promptly, it is claimed.
A new study by invoice finance provider Bibby Financial Services, which has regional offices in Cleckheaton, found the trading performance of small businesses in the region is being hampered as between 20% to 30% of their sales ledger is overdue at any given time.
Some 39% of firms in Yorkshire say the situation is so bad that it is squeezing cash flow and reducing opportunities for growth. Some 58% of firms consider late payment to be a major challenge for their business.
The survey said that for most smaller businesses, payment is rarely received on time – with 28% of owners and managers in Yorkshire having to wait up to a month past the invoice due date before getting their money.
In addition, 21% say they spend one day a month pursuing outstanding invoices – affecting productivity, performance and growth prospects.
Bibby said the findings supported David Cameron’s argument that up to £20bn in funding could be made available to small business if leading UK firms improved cash flow in their supply chain by joining up to the Government’s new supply chain finance scheme.
Mark Storey, spokesman for Bibby Financial Services in Yorkshire said the wealth and power of larger organisations should be used to support smaller businesses in Yorkshire along the supply chain.”