Businesses can find it extremely difficult to move forward when bigger corporations miss payment deadlines and deprive small firms of the funds they are owed.
Indeed, how can a company progress if it is supplying valuable goods and services to a bigger business that refuses to settle its debts on time?
The risk is, of course, if you push a client to make payments within the given timeframe, you could damage relations with them.
It can cost an SME millions to lose a contract with a major company but surely, if a client has received an invoice and the goods or services they ordered, they are obliged to meet their payments on schedule?
While the morality of the situation is up for debate, the harsh effects of this kind of practice are not. In the event of a late payment, SMEs can look to invoice finance to dig them out of a tight spot.
Through either factoring or invoice discounting, a small firm can access up to 90 per cent of the value of approved invoices through Aldermore.
By choosing factoring, companies benefit from the added bonus that the Bank will chase up the late payment, leaving the firm to get on with its normal running.
And for those concerned that the issue of late payments is not being sufficiently tackled, it is worth noting business minister Michael Fallon is placing pressure on big firms to pay their dues.
He is calling on FTSE350 firms to sign up to the Prompt Payment Code to encourage companies to meet payment deadlines and revealed to the Daily Telegraph that he will "name and shame" those businesses that do not sign up by February.
Mr Fallon told the news provider: "Large companies are sitting on an awful lot of cash at the moment and it is simply not fair if they don't pay their suppliers or sub-contractors on time."
Hopefully, then, the issue of late payments will become less prevalent so SMEs can concentrate on growing and strengthening in the years ahead.
The content published on this website is intended to provide information only. The reader should seek advice from experts on the subject matter and independently verify the accuracy and relevance of any information provided here before relying upon it or using it for any reason. You can view our terms and conditions here.