Late payments are a significant problem in the UK
Currently, there are striking concerns that late payments are getting worse, with less than one third (32 per cent) of payments being paid on time in Q2, according to the data company Dun and Bradstreet.
The previous quarter wasn’t considerably better, with 31.2 per cent of payments being made on time.
The worst offenders are large companies with only eight per cent settling their invoice by the due date.
More than a quarter of SMEs (defined as having 250 employees or fewer), paid their suppliers on time.
Two sectors that have recorded the sharpest deterioration in timely payments are health/ education/ social and finance/industry/property with a deterioration of 1.7 and 1.4 per cent respectively.
In Britain the average payment delay is 15 days, this is two days higher than the European average.
For UK SMEs supplying to larger companies, late payments remain a significant problem.
Markus Kuger, Senior Economist at Dun and Bradstreet said: “What is perhaps most worrying from the data is the sheer volume of late payments UK-based companies are having to contend with, not least as a result of weaker retail sales and the uncertainty of the impact of Brexit on businesses.
“Although there is legislation in place to assist small businesses with their struggle against late payments, the majority of the time they take no action for fear of alienating their larger customers. Late payments affect businesses across the sectors and of all sizes and give rise to tighter financial conditions and higher administrative, transaction and financial. With continued uncertainty for the foreseeable future, it is likely that we will see further deterioration in prompt payments due to rising headwinds triggered by the Brexit vote.”