Late payments to small and medium-sized businesses have soared from £11 billion to £16 billion in two years, said BACS Payment Schemes, the authority on automated payments.

New figures released by BACS reveal an ever-increasing number of SMEs are experiencing problems with late payments with 59 percent of small businesses having experienced problems with delayed customer or supplier payments. The number is almost double that of BACS findings in 2004 which previously showed that just a third of SMEs had experienced some sort of delayed payment.

The figures were obtained as part of a Market Research Programme conducted on behalf of BACS in June 2006. Business Research specialists Continental Research conducted 500 business interviews with managing directors, financial directors and senior managers of UK companies.

Michael Chambers, BACS managing director, described the late payment figure as “staggering” and said it showed the impact “cannot be under-estimated”. He said: “Late payments now pose a considerable problem for more than half of all SMEs in Great Britain – if this figure continues to rise, the knock on effect for the UK economy could be disastrous. Business and financial managers up and down the country need to tackle late payment issues head on to safeguard the commercial interests of their organisations.”