The average builder in Scotland is owed £90,000 in overdue invoices.
This is according to new research from the Scottish Building Federation, which found that four fifths of Scottish building firms have experienced late payment over the course of the last year.
But late payment is not restricted to Scotland. Overdue invoices remain a major issue for companies south of the border too - indeed, the problem has become so severe that it threatens the stability of thousands of firms.
A single late payment can cause serious financial concerns for small businesses. So how can you help to ensure that your small firm is protected?
1. Credit check your customers
Credit checks are one of the most important tools in your late payment arsenal. Before you agree to extend credit, consider checking your customers' ability to pay. A simple check, using a company like Experian or Equifax, is quick and affordable, and can help you make informed choices when it comes to credit.
2. Make your payment terms clear
Ignorance of payment terms is one of the most common excuses for late payment. Make sure that your payment terms are clearly communicated at every stage of the sales process. Ensure that they are attached to any invoices, and that you offer a range of potential payment methods where possible.
3. Keep on top of invoice ageing
It is vital that you keep track of the invoices you have issued. Often, an improvement in the processes by which you manage outstanding payments can lead to a significant reduction in ageing. Make sure that you have oversight of all the invoices you currently have out. You might choose to do this through your existing accounting software.
4. Chase, chase, chase
Make sure that you chase invoices as soon as they become due. Often, a simple chasing email, letter, or phone call is enough to ensure an invoice is paid. Many accounting and bookkeeping software solutions enable you to automate this process.
5. Be prepared to take legal advice
Finally, it is important to understand that sometimes there is no other solution other than to pursue legal action. Legal claims relating to unpaid invoices rose in number by 17 per cent during the final quarter of 2012, suggesting that small businesses are feeling the late payment squeeze ever more severely. Read our article on the 'small claims court' for more.