Businesses tackling a £26b late payment problem

Late payment remains one of the biggest frustrations for finance directors. Although it has become commonplace in UK business, normal does not mean acceptable.

A persistent culture of delayed payment is damaging trust between suppliers and customers while tying up billions of pounds in working capital.

Research from the Department for Business and Trade shows UK firms are owed around £26 billion in late payments at any one time, with the average affected business carrying £17,000 in overdue invoices. That’s cash unavailable for paying suppliers, investing in growth, or managing day-to-day cash flow. For organisations handling high invoice volumes, these delays quickly multiply, leaving finance teams struggling to keep up.

The impact of late payment extends beyond a single business. Delays often create a knock-on effect down the supply chain, particularly in sectors such as construction, recruitment, and logistics where cash flow is already tight. Despite government initiatives like the Prompt Payment Code, many businesses still treat late payment as a cash flow management tool.

For high-volume creditors, the challenge is scale. Hundreds of invoices can fall overdue each month, making manual chasing inefficient and reactive. By the time debts are escalated, recovery rates often fall as debtors encounter financial difficulty.
The wider cost is significant. Late payments drain management time, strain relationships, and in some cases force unnecessary borrowing. Research suggests around 14,000 UK businesses close each year as a result of late payment - almost 38 every day.

While changing payment culture takes time, businesses can protect themselves by setting clear payment terms, prioritising high-risk debtors, automating credit control where possible, and escalating overdue accounts promptly. Those with structured, consistent processes are far more likely to recover what they are owed.

We can help your business improve cash flow, reduce bad debt, and safeguard customer relationships. With over 45 years of experience within debt recovery, we have developed the most relevant, sophisticated and effective strategies for ensuring revenue streams are protected.
Contact Controlaccount today to find out more.