US companies are among the worst late payers for UK small businesses, taking an extra 51 days to settle up.
The overall number of unpaid invoices for small and medium-sized businesses in the UK has fallen this year to just 39% of invoices sent, down from 43% in 2018.
However, the average wait time for unpaid invoices grew from 12 days last year, to 23 days in 2019.
The figures come from MarketFinance which studied 100,205 invoices raised by UK SMEs between 2013 and 2019.
“Late payment practices harm business cash flow, hampers investment and, in extreme cases, can risk business solvency,” said MarketFinance’s External Relations Director Bilal Mahmood.
“It’s great to see that fewer invoices were paid late in 2019 but worryingly, those that were paid late took twice as long as in 2018, up from 12 days to 23 days.”
The UK government has launched schemes including the Prompt Payment Code and Duty To Report, however MarketFinance points out that while these have raised awareness they lack “bite”.
Of particular interest was the insight into which countries are most likely to pay late, with US companies taking an average of 51 extra days to settle their invoices and German firms taking an extra 32 days.
“SMEs owners have come to expect long payment terms but late payments are inexcusable. For every day an invoice is late, it’s more time spent chasing payment,” said Mahmood.
“This means less time for business owners to focus on growing their business, coming up with innovative ideas and hiring more people, or just paying their staff and bills. Things need to change quickly.”