SMEs waited an average of 61 days to be paid by debtors in the third quarter, according to a new survey by ISME.
The organisation’s Credit Watch survey shows the average payment waiting period for SMEs increased by four days between July and September.
The study of 764 businesses also found nearly a quarter of smaller companies are experiencing delays of three months or more, representing a rise of 17% on the second quarter.
One in 20 SMEs is waiting 120 days to be paid by its debtors, while 18% of firms are afraid to charge late payments fees over fears they may lose custom.
According to ISME’s research, a third of ‘big businesses’ are taking longer to make payments than previously.
Companies in the wholesale sector are waiting an average of 69 days for payment, while those involved in hospitality have a wait of 38 days.
ISME Chief Executive Neil McDonnell said: “It is disappointing to see payments delays increase by four days; to the highest in almost two years.
“These delays have serious consequences for businesses, particularly micro and small medium enterprises.”
ISME is calling for a statutory 30-day payment regime – with no opt-out – to protect SMEs.