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According to the latest data, UK SMEs now have to wait up to 23 days on average for late payments to be made.
MarketFinance, a peer-to-peer invoice finance platform, has analysed late payment data between 2013 and 2019 from 100,205 invoices raised by UK SMEs to give a detailed overview of the late payments pressures SMEs face.
It found that the overall number of unpaid invoices for small and medium-sized businesses in the UK has fallen in the last year to just 39 per cent of invoices sent, down from 43 per cent in 2018.
However, the length that many have had to wait has almost doubled from 12 days last year, to 23 days in 2019.
The data shows that US companies are among the worst late payers for UK small businesses, taking up to 51 days to settle each invoice.
Over the longer term, the analysis found that larger debtors insisted on longer payment terms (49 days) than smaller debtors (37 days) and that when invoices were paid late, these larger debtors also settled much later (94 days) compared to smaller debtors (42 days).
SMEs within the professional and legal service sectors were the worst affected by late payments last year, with 70 of their invoices being paid late, up from just 30 per cent in the previous year.
Manufacturers, retailers and creative industries businesses were also severely affected by late payments during the last 12 months. In comparison, the utilities and energy sectors saw a reduction in late payments during the last 12 months; falling by almost half.
Bilal Mahmood, Market Finance’s External Relations Director said: “Late payment practices harm business cash flow, hampers investment and, in extreme cases, can risk business solvency.
“It’s great to see that fewer invoices were paid late in 2019 but worryingly, those that were paid late took twice as long as in 2018, up from 12 days to 23 days.”