Scotland’s small companies experienced a significant rise in late payments as business confidence fell in the run up to the UK General Election, new research from the Federation of Small Businesses (FSB) has revealed.

The FSB’s Small Business Index (SBI) for Q2 of 2024 found 62.5% of Scottish small businesses experienced problems with late payments, significantly more than in the previous quarter (57%), while 32.29% reported the problem was getting worse.

“The rise in late payments came as confidence among small businesses slipped into negative territory, with the SBI in Scotland falling by 17.7 points to -7,” said the FSB.

“This followed the first positive reading for a year in the first quarter of 2024.”

FSB Scotland’s Policy Chair Andrew McRae said: “Late payment has been a scourge on thousands of small businesses for far too long. The latest SBI results show it is a problem which, without decisive action, is spiralling out of control.

“All small firms are asking for is fair treatment from bigger companies. And where that doesn’t happen, the government needs to step in to ensure an even playing field.

“Government at every level needs to be doing all it can right now to reinvigorate economic growth. But you won’t get growth if money’s not moving round the economy and late payments are crippling businesses’ cashflow.

“Boards of large companies can be made more accountable for their payment practices.

“And, specifically in Scotland, while the procurement reform programme emphasises the need for prompt payment in the supply chain for public sector contracts, it’s clear that message needs to be bolder and firmer in order that we can address the problem highlighted by our figures.”