The research suggests smaller manufacturers have to wait 67 days from the time they issue an invoice, compared to just 38 days for larger firms. Additionally, the report shows the gap widened in 2015 as large-scale manufacturers were able to negotiate shorter payment terms that their smaller competitors could not.
Jeff Longhurst, chief executive of ABFA, said that, for SMEs in the manufacturing sector, “waiting more than two months to be paid is now a normal state of affairs”.
"During the recession, some businesses looked to increase their payment terms in order to give themselves breathing space in the tough economic climate,” he continued.
"Unfortunately, in many sectors there's been a cultural shift and delaying payment to suppliers is now common practice. Larger businesses need to treat their smaller suppliers more fairly."
He went on to warn that these problems are particularly prevalent in the manufacturing sector.
"Late and extended payment times are deep-rooted issues in the manufacturing industry,” he said. "This doesn't just impact on the business in question; they need to pay their own suppliers and so there is a cumulative negative effect down the supply chain."
