The UK’s leading invoice finance platform has unearthed some startling truths relating to the late payment of invoices. Analysis of roughly 6,000 invoices with blue chip debtors – tracked by MarketInvoice since February 2011 – has found that over half (56%) are paid late. 9.7% were paid more than 30 days late. Of all the invoices that were paid belatedly, the average delay was 17 days longer than the contracted terms. The invoices themselves were all owed by large corporations, charities and public sector bodies – to smaller UK businesses with annual turnovers between £100k and £10m.
This is all rather worrying news for UK SMEs. Anil Stocker, CEO of MarketInvoice, explained the problem – as well as offering up some potential solutions:
“Late payment is a silent but significant killer of UK businesses, and it has become a dangerous norm for blue chip organisations to pay invoices beyond the agreed terms. Consistent late payment damages our economy and almost every high street name you can think of is doing it.
“Through a combination of bureaucratic inefficiency and calculated cost-saving large organisations have generated a culture which takes advantage of the vulnerable position smaller businesses find themselves in when dealing with important customers.
“There are mitigations that smaller businesses can put in place to encourage customers to pay on time. Building a good relationship with your customers’ accounts payable teams and understanding their processes can help, and it’s vital to invoice promptly and accurately. You can also consider selling your invoices to get the money in straight away - this not only eliminates the risk of late-payment but also enables business to invest in growth projects. Increasingly businesses are using MarketInvoice’s selective invoice finance to take back control of their cash-flow.”
