Contractors and freelancers are becoming increasingly concerned about late payment of invoices with more than a quarter reporting some payments are settled at least 60 days late, new research shows.
The study by Workwell & IPSE found nearly half (49%) are concerned about the ongoing issue of late payments with 11% saying they are very concerned.
Workwell, a leading provider of services to flexible workers and recruiters in the UK and overseas, collaborated with IPSE, a community of over 35,000 self-employed people.
The study with contractors, freelancers and people owning their own businesses found late payment remains a major problem for the sector. More than a quarter (26%) say the issue has worsened in the last two years with just 2% of those questioned saying it has got better. Around 72% say the issue has not changed in the past two years.
However the detail of the research for the organisations which support thousands of flexible workers and recruiters in the UK and overseas shows how widespread the issue is and how it affects cashflow and planning.
Around half (49%) of those questioned said at least some of their annual income is paid at least 20 days’ late. On average they estimate that 20% of their annual earnings is not settled until at least 20 days after the due date.
Workwell & IPSE’s study found 36% said at least some of their income is at least 30 days late and on average they estimate that affects 20% of billing.
The number affected dropped to 26% for those who say some of their billing is at least 60 days’ late and they estimate on average that affects 21% of their total earnings.
Chris Mollan, Head of Accountancy Services at Workwell said:
“Late payment has always been a major issue for contractors, freelancers and those running their own businesses but it is worrying that nearly half are concerned about late payments particularly given the current economic climate with bills and mortgages rising.
“It is concerning to also see that so few contractors, freelancers and small business owner are seeing any improvement in late payment and that for many invoices are at least 60 days overdue.
“Late payment makes managing cashflow and planning for the future very difficult for freelancers, contractors and small business owners and they need expert support to ensure that their businesses remain on track.”
Workwell’s award-winning accountancy service is designed to help contractors, freelancers and business owners to manage their business easily and tax-efficiently. Clients are supported by their own dedicated accountant and have online accounting to access and manage their accounts easily, from anywhere. It also provides umbrella company solutions for contractors.
Workwell enables businesses in the UK and overseas to more easily and compliantly benefit from flexible workforces. Its services for recruiters and end hirers are designed to take away the risk, hassle and complexity of contingent labour supply.
