Small Businesses across the country are owed a staggering £23.4billion in late payment debt, according to figures released by payment firm Pay UK.

The company who run Bacs Direct Credit and Direct Debit payment services, say the figure has risen by £10.4billion in the past year alone.

The research also shows that UK SMEs are facing a bill of £4.4billion per year just to collect the money they are owed with 22 per cent of those waiting on funds spending £500 per month chasing payments.

And the number of businesses experiencing overdue payments has hit 54 per cent among small to medium size companies - the highest level since 2015.

The average late payment debt burden has also increased to £25,000 per company, up from just over £17,000 in 2018.

SMEs are also reporting that, on average, a debt burden of £35,000 could jeopardise their business.

Of those SMEs impacted by delayed payments, 63 per cent say they have a negative effect on their businesses.

More than a third (35 per cent) are forced to rely on bank overdrafts, while almost a quarter (24 per cent) say that being paid late forces them to hold off paying their own suppliers.

Paul Horlock, Pay.UK CEO, said: "It is concerning that so many smaller businesses are struggli

ng because of late payments in 2019, especially as there are so many ways they can now get paid.

"Offering customers a choice of payment or automated options can help remove barriers to make sure a bill is settled on time."

The research also reveals that 13 per cent of SMEs experiencing late payments struggle to pay their business bills, 12 per cent have difficulties paying their own staff on time, and 10 per cent have to rely on invoice financing to draw cash into their businesses.