Publications that covered this story include the Financial Times on 30 December and the Daily Mail on 2 January.
- Barely half of invoices being paid within 30 days
Some larger businesses have admitted that they are taking up to 113 days to pay some of their suppliers.
New rules came into force in April 2017 under which big businesses* must report twice a year on how quickly they pay their suppliers. The first 200 of these reports have now been filed, which show:
- Big businesses pay an average of only 52% of invoices within 30 days
- Only 29% of those that have reported so far have an average of 30 days or less
- Some big businesses have ‘agreed terms’ with their suppliers of up to 230 days for invoice payment
Figures show just how ingrained late payment culture has now become in the UK, with SMEs bearing the vast majority of the burden and suffering negative impact on their growth as a consequence.
Although the newly published data raises concerns about the resulting financial impact and stress on suppliers, some larger businesses are managing the process well, turning payments around in only five days on average.
Richard Lloyd-Warne, partner in our London office, comments: “No SME should wait three months for an invoice to be paid, and no big business should give itself three months to pay an invoice and still miss the target.”
“Multiple governments have tried different ways to get bigger businesses to pay on time, including allowing them to levy interest on late invoices, and the much-delayed creation of a Small Business Commissioner role. These figures show that these moves have yet to make any significant impact on the culture of late payment.”
“It is good to see some larger businesses taking less than 30 days to pay their suppliers. However, with the majority taking much longer, being paid late is now just a fact of life for many SMEs.”
The Department for Business, Energy and Industrial Strategy’s reports on big business payment practices can be found here.