Initial research by the Forum of Private Business and credit reference agency Graydon shows that 62 per cent of firms say they pay suppliers’ bills late.
Of these, 54 per cent blame the time taken by companies they supply to settle their bills.
Forty per cent of late payers also blame ‘insufficient funds’ while another 39 per cent say a lack of affordable finance is a contributory factor.
Almost two-thirds of business owners believe the benefits of settling accounts on time outweigh the advantages of paying late.
Business groups warn that late payment of bills is adding to the huge financial pressures on business owners and they want more to be done to tackle the problem.
Shockingly, 61 per cent of firms report customers extending their payment terms without notice or consultation. Large companies, including Dell, Carling UK and Molson Coors, have all increased the length of time before they pay bills – sometimes to 90 days.
The Government last year suggested that an EU late payments directive, which will make a 30-day standard invoice payment compulsory for all businesses, could be fast-tracked in Britain.
However, it has dropped this and is now looking at how firms can best be protected under British law. The directive will not come into force until 2013.
On Thursday, Business Minister Mark Prisk will host a workshop to provide companies with practical advice and guidance on the benefits of prompt payment.
Phil Orford, chief executive of the FPB, said: ‘Late payment is the scourge of small businesses.
‘While most believe in paying promptly they are often prevented from doing so by late payments from their customers, creating a knock-on effect right down the supply chain.’
Gordon Skaljak, spokesman for Graydon, said: ‘This is not an issue the business community can afford to gloss over.’