INVOICES are taking, on average, 37 days to be paid to Scotland's small firms, new research shows.

It was also found 31 per cent of bills issued by small businesses in Scotland take longer than 30 days to settle, which is just below the national average of 32%, according to the study by Lloyds Bank Commercial Banking and the UK Small Business Commissioner.

While the average of 37 days is a figure which equals the national equivalent, it is still well above the commissioner’s recommended exemplar of 30 days.

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The findings have led to an 'alert' scheme being proposed to allow firms to judge whether to take future contracts based on payment history.

The public data research analysed official payment reporting returns based on the annual reports of large businesses.

It also found that 65% of large businesses have an average bill payment time of more than 30 days.

Only 14% of companies from 7,010 analysed reported payment terms of 19 days or under.

The Herald:

Paul Uppal, the commissioner, above, is to recommend a traffic light warning system to signal which large businesses pay their bills late to small firms.

Mr Uppal said that the information can help small firms make sound future contract decisions.

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He said: "The effect of late payment on Scottish small firms can be devastating.

"A traffic light system would be a simple and effective way of demonstrating which larger firms have structured their supply chain in such a way that it is more than an exchange of goods or services but also resembles part of their financing model."

The office of commissioner was launched in 2017 to monitor fair payment for the UK's 5.7 million small businesses.