36% of SMEs are unable to say how much they have outstanding, according to research by funder Bibby Financial Services.

Of the businesses that did know, 31%, said they were owed more than £20,000 and 14% were owed more than £50,000. 6% were owed in excess of £100,000.

David Postings, CEO of Bibby Financial Services believes the findings highlight ongoing difficulties small businesses face in managing credit control. He said: “Having a robust credit control process in place, and being able to chase invoice payment is the key to effective cashflow management which is critical for any business.

“But many small businesses – particularly those with few or no employees – cannot effectively manage outstanding payments because they are focused on developing new business and fulfilling existing orders.”

Findings of the study – conducted among 1,000 small and medium-sized enterprises in Q3 – represent a barrier to growth for thousands of small businesses throughout the country. The issue is particularly acute in the hospitality sector, with 67% unsure of the amounts owed to them. Meanwhile, 39% transport and distribution firms admit to being unclear about what was in their payment pipeline.

Postings said: “This represents a significant amount of money owed to UK SMEs and the value of these outstanding invoices could be reinvested into businesses in the form of recruitment or technology.

“Small and medium sized businesses are the backbone of the UK economy so this represents a significant threat to long-term economic growth.”

The specialist funder is calling for more businesses to consider forms of finance to bridge the payment gap or to outsource the collection of payments to specialist providers.

Postings added: “Invoice finance not only provides working capital to allow businesses to operate more effectively, but funders can help SMEs to take control of invoice payment, credit control and sales ledger management.”