Two-fifths of small and medium-sized companies (SMEs) are forced to pursue late or non-payers of invoices through the courts, according to a survey. A further two-thirds experience reduced cashflows as a result of late payment.

The survey from the Bank of Scotland Corporate Banking found that half of the 1,000 respondents had to wait up to a year for a payment, with a quarter waiting up to two years. In general, half of all businesses had to wait on average for 60 days for the bulk of payments, the survey found.

Eddie Morrison, the Bank of Scotland Corporate Banking’s managing director, said: “The research suggests many small businesses are suffering from the impact of late payments on their business cashflow.

“Despite legislation to address this issue, many owner-managers would view levying a late payment charge on a client as commercial suicide.”