The UK's small business insurance customers have more problems through late payments than a lack of profitability, it has been suggested.
Business Link adviser John Grange noted that the recession has caused many small business insurance holders to face declines in demand for their goods and services.
He explained that this often causes them to downsize or seek new markets, but experiencing delayed payments while doing this can result in difficulties as their income is reduced while overheads remain at the same level.
Mr Grange said: "If you add into those late payments you as a small business can become increasingly vulnerable because you do not have the cash in the bank to pay the people you owe at the right time."
In addition, the expert suggested that late payments are more of a "killer" for small business insurance customers than their profitability levels and advised them to concentrate on effective management of their cashflow.
Business minister Shriti Vadera recently announced that 11 large firms have joined the government's Prompt Payment Code, which promises quicker settlements to smaller companies.
