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New data shows architects waiting 11 days longer to be paid

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Architects had to wait an average of 10 weeks to be paid in 2014 - an increase of 17 per cent on the last figures reported in 2008

According to the study by the Asset Based Finance Association (ABFA), practices are having to hold out for 71.2 days before having their bills paid compared to at the start of the recession when it was 60.7 days.

However the profession did marginally better than others in the industry with construction and property firms having to wait an average of 107 days - nearly 15 weeks - to receive payment in 2014.

The 22 per cent rise from 88 days in 2008 was the highest seen in any of the sectors covered by ABFA’s research.

In contrast, businesses in the hospitality sector - including hotels, restaurants and bars - have some of the shortest waits for payment, at an average of just 20 days, down by a fifth from seven years ago.

The research suggested that demanding upfront payment had helped to drive down payment times in some sectors.

In education, payment times halved from an average of 51 days in 2008 to 25 days in 2014.

But SMEs across all industries have found themselves waiting longest for payment.

On average, firms with turnovers of less than £1million waited 71 days for payment, while firms with a turnover of between £250million and £500million find themselves waiting only 48 days.

Commenting specifically on the construction and real estate sectors, ABFA chief executive officer Jeff Longhurst said: ‘[These sectors] have seen a long history of delays in payment.

‘Despite numerous attempts by several governments to improve the situation, these figures show the problem is actually worsening.

‘For a lot of construction businesses, the effects of the recession were exacerbated by the difficulties they had in getting paid on time for the contracts they did win.

He added: ‘Long supply chains in industries like construction mean that the ripple effect of delays is likely to affect many other businesses further down, with SMEs hit the hardest.

“In an industry with high overheads in terms of materials and labour costs, this can be incredibly frustrating and difficult to cope with.”

The data backs up findings from Begbies Traynor’s Red Flag Alert in April, which showed that the number of contractors experiencing ‘significant’ financial distress rose by 45 per cent in the past year.

Of the firms under significant strain, 97 per cent were SMEs.

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