Due to the scourge of late payment, the average small to medium business is owed £33,600 at any one time, according to a new report.

The report, by BACS Payment Schemes, also warns that 17 per cent of such businesses could go bust if payments are up to 60 days late.

It also stresses that the problems caused by managing late payments could jeopardise business relationships.

To help small businesses get to grips with late payment and find a solution to their cash flow nightmares, BACS have devised the “payment persona test’.

The test presents a number of payment scenarios, which small business owners will be all too accustomed to, and asks participants to select their typical response in order to gauge their ‘payment personality'.

Once they have completed the quiz, participants will then receive useful hints and tips as to how best to prevent late payment.

Michael Chambers, managing director at BACS, said: “Although the quiz itself takes a light hearted look at the issue, the ramifications of late payments could be very serious.

“UK small businesses are concerned that late payment by their customers could aff3ect their ability to pay over three million employees.”