Scottish SMEs write off bad debt as late payments tighten cashflow

Scottish SMEs are facing mounting cashflow pressure, with new data from Bibby Financial Services showing that 39% of businesses have been impacted by bad debt over the past year.

Among those affected, firms wrote off an average of £27,500, while unpaid invoices now stand at around £60,000 per business, highlighting the growing strain across supply chains.

The findings point to a worsening payment environment, with 69% of SMEs reporting slower customer payments compared with a year ago. The knock-on effect is already spreading, as nearly one in five businesses have delayed paying their own suppliers to manage liquidity.

“Scottish SMEs are on a knife edge,” said James Tristan Hart, Business Manager at Bibby Financial Services. “Rising costs and slower payments are creating a dangerous combination for cashflow.”

The data also shows a sharp rise in insolvencies across supply chains, reinforcing concerns that financial stress is becoming increasingly interconnected.

For receivables finance providers, the trend underscores growing demand for solutions that help businesses manage delayed payments and protect working capital.