Late payment getting worse with 62 per cent of small business invoices not settled until overdue
The UK’s late payment problem is getting worse every year, according to new research from P2P business lender MarketInvoice and the majority of invoices are now settled late.
The report which tracked over 30, 000 invoices across five years and 80 countries has revealed that some 62 per cent of UK SME’s invoices are paid after the due date, with one in five not settled until two weeks after they fall due.
The scale of late payment in Britain is much worse than in other major economies, with only one in four invoices settled tardily by firms in other European countries. Debtors in Belgium pay invoices an average of 4.1 days early, while Irish firm owners pay exactly on time.
The data also show the problem getting better when it comes to firms in the rest of Europe paying British ones at the same time as it gets worse between companies in the UK. In 2013, only 45 per cent of UK firms? small business invoices were paid late, rising to half in 2014 before climbing to its current high. In contrast, the proportion of EU invoices paid late was 60 per cent in 2013, falling to 40 per cent last year.
Average number of days early or late debtors pay small British firms:
Japan: 6.5 days early
Belgium: 4.1 days early
Netherlands: 3.0 days early
Switzerland: 0.8 days early
Germany: 0.5 days early
Ireland: 0.1 days early
Denmark: 1.2 days late
China: 1.9 days late
Finland: 3.4 days late
UK: 5.85 days late
France: 6.1 days late
USA: 7.1 days late
Canada: 12.0 days late
Poland: 12.0 days late
Israel: 13.5 days late
UAE: 14.3 days late
South Africa: 16.5 days late
Mexico: 18.6 days late
Hannah Wilkinson is a reporter for Business Advice. She studied economics and management at Oxford University and prior to joining Business Advice wrote for Kensington and Chelsea Today about business and economics as well as running a tutoring company.
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