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Case study: The effect of late payment on SMEs

Posted: 2012-07-11 in Examples    |   Tagged: b2b pr, b2b pr case study, case study, graydon, weber shandwick


Recent work by Weber Shandwick, on behalf of their client Graydon UK, took the financial woes of small businesses to the UK’s business leaders. Compiled by @jimbeckham.

Late payments of invoices cause far greater disruption to SMEs than for larger companies, which have more contingency capital to draw from. Profits, growth and even the continued existence of an SME are all potentially at risk. Despite this, findings have shown that few SMEs use formal procedures to deal with late payments, instead accepting them as inevitable problems associated with running a business.


Graydon are one of the top five credit risk and credit management providers in the UK. They give their clients access to credit information for companies in more than 190 countries, to help assess the risk of doing business with them.

Weber Shandwick’s aim was to highlight Graydon’s work helping SMEs manage credit risks by both raising awareness of this issue and establishing Graydon as a thought leader. Coverage would alert SMEs to the solutions available to them, and hopefully encourage future legislation to tackle this issue head on.



Graydon teamed up with the Forum for Private Business (FPB), a support organisation committed to helping small businesses become more profitable. They offer advice on business opportunities, reducing costs, dealing with legislation and increasing overall efficiency.

Graydon commission a survey of 500 UK small business leaders asking about their experiences with late payments. The survey revealed:

  • 51% consider late payments a problem; for 23% it is a serious issue.
  • 16% (80 companies) had almost been put out of business directly because of unpaid invoices.
  • 56% have subsequently caused a domino effect by paying their suppliers late, because of a late payment.
  • 45% suffered an erosion of profits, proving that the money does not just even out eventually.
  • 23% of companied said that late payments undermined their growth investment for the future.
  • Credit control procedures are shown to lessen the effect of late payments, yet only 44% of those surveyed actually use these formally.
  • Only 30% use existing legislation to charge interest on late payments.


Following the results, Graydon hosted a House of Commons summit for government and business representatives to address the issue. Alongside the FPB were representatives from the department of Business, Innovation and Skills (BIS), the Labour Party, the Institute of Credit Management (ICM), the Association of Certified, Chartered Accountants (ACCA) and Lloyds TSB Business


The findings of the survey and the summit gained over 75 pieces of coverage in the UK including articles in the Financial Times, Telegraph and Daily Mail.

Presenting these findings to key decision-makers had the potential to create positive changes that can reduce the impact of this issue, and to build Graydon’s profile to other thought leaders on the issue.

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Think B2b

Sat 21st July, 2012

Great article, for our experience late payment is a massive problem with in the construction industry and seems to be the number one cause of companies going out of business.

Wybrand Ganzevoort

Wed 8th October, 2014

In South African we have a serious problem with 87% of national and provincial government departments not paying invoices within the 30 days as required by law. This as well as other supply practises are killing small business. See www.collectivevaluecreation.co.za/enteprise-development/destroying-a-supplier for more details on this.


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