Businesses suffering from significant Late Payment delays

Latest data from Money.co.uk has found that on businesses are facing 47-day payment delays.

The FSB has described late payments as one of the ‘biggest problems’ facing small businesses and with the Government announcing plans to crack down on late payments with stricter laws to help smaller businesses and grow the UK economy The research highlights the problem.

The research analysed data from the Department for Business and Trade to show how late payments affect UK businesses.

Businesses in the manufacturing industry are made to wait the longest to receive payments for goods and services. Businesses in this sector receive payments after around 47 days. This could be due to the industry’s complex supply chains, with multi-tiered supplier relationships slowing down how quickly payments are made.

The wholesale and retail trade sector, which also includes the repair of motor vehicles and motorcycles, is in second place, with a median wait for payments of 36 days. This industry often has businesses operating on thin margins and relying on credit to maintain inventory. As such, payment delays could stem from customers waiting to asses the product performance before settling their invoices.

The agriculture, forestry, and fishing industries also share second place at 36 days. Given their seasonal nature, with crop, forestry, and livestock cycles affecting harvesting times, buyers often delay payments until they generate revenue from sold goods. However, this can put a significant strain on the industry’s producers.

Joe Phelan from money.co.uk said “While overdue invoices might feel like an inevitable part of running a business, there are ways to mitigate their impact. By adopting proactive measures and leveraging financial tools, SMEs can build resilience and protect their operations from the risks associated with late payments.”