Large firms are exploiting their smaller counterparts through delaying payments, it has been claimed.
According to the Federation of Small Businesses (FSB), big companies have also been imposing new terms and settlement fees on SMEs.
It gives the example of Alliance Boots, which wrote to suppliers last month telling them they would be paid up to 75 days from the end of the month of invoice and that a 2.5 per cent fee would be levied.
John Wright, FSB national chairman, said: "Making small businesses wait 105 days for payment and charging them for the privilege of doing so is nothing short of outrageous."
Small firms are often afraid to take on big firms over late payments in case the lose contracts, he added.
Recently, the FSB called on the government to do more to help small firms.
According to the body, SMEs are vital to the UK economy as a whole and the local communities which they serve.
