Research from The Prompt Payment Directory has revealed that persistent late payments are pushing construction companies to the brink of bankruptcy and causing unnecessary stress for professionals.
A recent study, which interviewed 400 owners, MDs and CEOS of small construction businesses that suffer from poor cashflow, revealed that 74% of construction companies have been on the brink of bankruptcy or liquidation, with 48% blaming cashflow for their panic attacks, anxiety and depression.
The industry has been plagued with ongoing issues relating to late payments, and is widely recognised as having the worst payment records in the UK. Although the causes for delays can be wide-ranging, they can often be attributed to retentions and the cash flow of clients.
The news comes in the lead up to Mental Health Awareness Week, which starts 14th May and aims to raise awareness and combat the stigma surrounding the subject.
Hugh Gage, Managing Director of The Prompt Payment Directory, comments: “To end the UK’s poor payment culture, we need greater transparency throughout the entire supply chain and to encourage best practice”.
The government has introduced certain mechanisms to help combat late payments such as The Duty to Report’ which requires large companies to report on their payment practices and performance, however this only applies to large companies. In the meantime it seems like there’s no perfect solution.