The major issue of late payment: how to improve payment times

Anna Stubbs • March 18, 2026

“Many small businesses are now operating under pressures comparable to those experienced during the Covid pandemic, but this time without an emergency support framework in place.”

“SMEs are facing late payments, rising energy costs, increasing crime, a complex tax system and barriers to growth that are compounding rather than easing.”


Rt Hon Liam Byrne MP, Chair of the Business and Trade Committee.


A recent report from the UK Government’s Business and Trade Committee has found that UK small businesses are facing increasingly hostile trading conditions, in no small part due to the endemic problem of late payment.


The key problem of late payment

With liquid cash in short supply, many customers are delaying payment of supplier invoices until the very last moment. Not only does this have a negative impact on your cashflow position. It also increases your aged debt and puts real pressure on your ability to cover operational costs.


The recent Small Business Strategy report found that:

  • Evidence from Sage indicates that UK small businesses were owed £112 billion in unpaid invoices by the end of 2024
  • Nearly half of all invoices are paid late, even with payment terms of 60 to 90 days now routine in sectors such as construction
  • Around 38 small suppliers are estimated to close each day as a result of late payment practices.


Helping you improve your payment times and cashflow

If you’re worried about slow payments from your customers and the cumulative impact this is having on your cash position, book some time for a chat with our team.


We can review your accounts receivable processes and your aged debt to suggest proactive ways of speeding up those payments, including:


  • Offering multiple payment methods like credit cards and digital wallets
  • Sending invoices immediately after delivery of goods or services
  • Automating your follow-up reminders through your accounts software
  • Implementing early payment discounts to provide a clear financial incentive
  • Running credit checks on new clients to identify potential payment risks.

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