Research by the Association for Consultancy and Engineering (ACE) has revealed that small consultants have an average wait of 76 days for their invoices to be paid.
The ACE’s Benchmarking Lite survey of 36 firms with fewer than 50 staff revealed that for 20% of small firms the wait was more than 100 days. The wait is less for larger firms who typically have an 85 day wait for payment, but the wait is significantly longer than the government’s stated desire to see bills paid within ten days.
The ACE said that with 17% of firms running at a loss, and margins falling across the sector, the long repayment times can have significant problems for small companies with limited reserves.
“With increasing financial pressures facing client companies in the public and private sectors, small engineering companies are facing significant waits to be paid for the vital work that they do,” said ACE chief executive Nelson Ogunshakin, adding that he appreciated the government’s commitment on the issue through measures such as the Fair Payment Charter which sets out a maximum 28 days on payment.