63% of small business owners suffer from stress, anxiety or depression caused by late payments
Almost 7 in every 10 owners of small firm faced serious problems with late payments during the pandemic and 6 in 10 experienced stress, anxiety or depression because of it.
A survey from Juno the digital payments platform, shows that the late payment crisis is having a negative impact on the mental health of small business owners with 63% stressed, anxious and/or depressed as a result of cash flow issues caused by late payments.
Another fifth say they are on the brink of closure and 1 in 10 are thinking of making or have made redundancies. Those working in legal, manufacturing and retail sectors are most impacted by stress, anxiety and depression and the impact is greater among younger business owners with over 78% of those aged 21-30 years claiming cashflow was having a negative impact on their mental health.
Juno’s Co-founder and Chief Product Officer Pete Bailey says: “The problem of late payments has been around for a while but that does not mean that we should accept it. Businesses are facing a crippling crisis caused by a culture of late payments which continues to have a negative impact on their cash flow, ability to focus on growth as well as mental health and wellbeing.”
Solving the small business late payment crisis is vital since SMEs lie or die on their cash flow. However, they often feel trapped by the payment terms offered by their customers. Unfair supplier payment terms mask the full extent of how late payment impacts businesses. It affects their cash flow and the mental health and wellbeing of owners and employees, which has a knock-on effect on employment and economic growth.
This needs to change. As we build back better, fair and prompt payment should be an essential component of corporate governance. Companies that subject suppliers to unfair payment terms or pay late are not acting ethically and responsibly and should consider the longer-term impact on their own corporate reputation. Every business needs to play their part in creating a culture and a system of prompt and fast payment. Bigger businesses that adopt unfair or late payment practices, should take care of their smaller suppliers or they won’t be there in future to supply the goods those bigger firms need to keep their customers coming back.