1 in 6 Small Business invoices is being paid late according to latest findings in a report conducted by a Business banking company across the UK.
‘Tide’ commissioned YouGov to survey small business decision makers, including sole traders, to discover their payment terms, how often they experience late payments, and the actual duration before invoices were settled.
Tide calculated that the average payment term was 15 days. However, approximately 1 in every 6 (16%) invoices are paid late. Tide calculated that when late payment occurred, this added, on average, another 15 days, bringing the total up to 30 days.
89% of those surveyed have some form of payment terms in place, and the remaining 11% do not have one of the payment terms shown to respondents or are not sure. Nearly one third (30%) have payment terms of 30 days after completion, and more than a third (36%) are waiting 30+ days after completion. 17% are securing at least some payment ahead of beginning work. A lucky third (33%) never experience late payments.
When it comes to industries, retail is the top performer with just 11% of invoices paid late. IT & telecoms and construction professions experience more than 20% late payments – or 1 in 5. At the most extreme, small businesses operating in the IT & telecoms sector have average payment terms of 36* days, with payments arriving, on average, 12* days late.
AVERAGE STANDARD PAYMENT TERMS (DAYS)
AVERAGE LATE PAYMENT DURATION (DAYS)
ACTUAL* AVERAGE DURATION UNTIL INVOICE PAYMENT (DAYS)
AVERAGE PERCENTAGE OF INVOICES PAID LATE (%)
Finance and Accounting
Media/ marketing/ advertising/ PR & sales
IT & telecoms
Ordered by rank for actual* payment terms (average payment terms + average late time):