Northern SMEs bucking downward trend

MORE than half of UK small firms have been affected by the economic downturn, but those in the North are bucking the trend, according to new research.

The Bacs Payment Schemes study showed that while 37% of small to medium sized businessess (SMBs) nationwide reported cuts in spending and project delays, around 45% of Northern firms said that they had experienced no visible indicators of the economic slow down.

The study, which is one of Bacs’ regular investigations into corporate habits, also found that late payments were also causing smaller firms problems with more than a quarter of those interviewed complaining that they were spending more time than ever chasing money owed.

Interestingly, it is other small businesses and one man bands that are the worst offenders with 44% of respondents blaming individuals and 41% pointing the finger at SMEs.

In comparison, just 34% laid blame at the door of large corporates.

Michael Chambers, managing director of the not-for-profit membership-based industry body, said:

“With new stories breaking every day about the state of the economy, we wanted to ask the people at the coal face to find out exactly what SMBs in Great Britain are currently experiencing.

“Unfortunately, the overall results do seem to mirror what’s being reported more widely.”

He added: “However, it’s good to see that companies in the North of England and Scotland report that they seem to be weathering the initial storm better.”

Mr Chambers said that the issue of late payments had always been a challenging one for small firms and that Bacs had developed a guide to help limit the impact.

The guide suggests firms encourage trading partners to pay invoices by Bacs direct credit, use of late payment legislation, and payment of bills by direct debit.

It also recommends that prompt players are reward for their good practice.