In recent months, small- to medium-sized enterprises (SMEs) in the UK have faced a staggering 127% increase in bad debt, with an average write-off of nearly £40,000 per business due to unpaid invoices. This alarming trend has escalated from an average of £17,500 just six months prior, highlighting a growing crisis in cash flow management among SMEs. Research from Bibby Financial Services reveals that 40% of SMEs have encountered non-payment issues, a significant rise from 30% earlier this year. The consequences of late and non-payment are severe, potentially leading to a supply chain disaster, as noted by Bibby’s CEO, Jonathan Andrew. The report also indicates that 58% of SMEs have witnessed supplier insolvencies, while 56% have experienced customer bankruptcies. The government’s existing measures, such as the Fair Payment Code, are seen as insufficient. There is a pressing need for enhanced support and working capital solutions to stabilize SMEs and their supply chains.
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