Tax & admin Praseeda Nair · 28 September 2018

Year-end & cash flow
Named and shamed: 35 worst offending late payers and the crippling impact on small businesses

Micro businesses and freelancers may go out of business because of late payments. These are the 35 worst offenders.

The top 35 worst offending businesses for late payments in the UK include household names like E.ON and Thomas Cook.

Late payments are the scourge of the business community, especially for micro businesses that rely on steady income to keep them in the black. New research, however, reveals that only 4.7% of the businesses pay all their invoices within 30 days.

Companies with a 36 million annual turnover have an obligation to report to the government about their payment practices. According to research from invoicing specialists at?Business Expert, only 316 out of the 6, 613 businesses in the latest government report stick to 30-day payment terms. Additionally, 20%of the businesses in this list pay more than half of invoices days late.

The result UK SME’s are owed 44.6 billionin late invoice payments.

Here we round up the 35 worst offending businesses for late payments and what to do if you’re owed payment from a key customer.

The top 35 worst offending late payers

Business Expert’s research uncovered the top 35 worst offending businesses for late payments which include several household names.

Position	Company	Average days to pay	% Invoices not paid within agreed terms
1	WT FILM PRODUCTIONS LIMITED	287	100%
2	BAE SYSTEMS (OMAN) LIMITED	176	79%
3	ERNST & YOUNG (ASIA-PACIFIC) SERVICES LIMITED	175	92%
4	ERNST & YOUNG (ASIA-PACIFIC) SERVICES LIMITED	149	94%
5	KYOWA KIRIN LIMITED	144	72%
6	ERNST & YOUNG (EMEIA) SERVICES LIMITED	136	83%
7	COSTAIN OIL, GAS & PROCESS LIMITED	131	82%
8	TUI UK TRANSPORT LIMITED	129	96%
9	E.ON CLIMATE & RENEWABLES UK HUMBER WIND LIMITED	118	63%
10	ARDAGH METAL BEVERAGE TRADING UK LIMITED	113	92%
11	ERNST & YOUNG (EMEIA) SERVICES LIMITED	109	75%
12	NBCUNIVERSAL INTERNATIONAL NETWORKS ACQUISITIONS LIMITED	107	64%
13	BROWN AND MASON LIMITED	103	66%
14	ASPEN HEALTHCARE LIMITED	101	92%
15	SELECTA U.K. LIMITED	96	68%
16	UNIVERSAL PICTURES GROUP (UK) LIMITED	93	68%
17	SPORTSENGINE UK LIMITED	92	100%
18	TELSTRA LIMITED	92	83%
19	CARLSBERG SUPPLY COMPANY UK LIMITED	92	67%
20	FNZ (UK) LTD	91	90%
21	PLEXUS CORP (UK) LIMITED	91	78%
22	WILLIS INTERNATIONAL LIMITED	91	76%
23	CAPE ENGINEERING SERVICES LIMITED	91	66%
24	TELSTRA LIMITED	88	82%
25	THOMAS COOK GROUP PLC	88	80%
26	KIER PARTNERSHIP HOMES LIMITED	87	81%
27	WILLIAM GRANT & SONS UK LIMITED	86	71%
28	SDC TRAILERS LIMITED	85	78%
29	MWB BUSINESS EXCHANGE CENTRES LIMITED	84	90%
30	WORLDPAY AP LTD.	83	94%
31	MCNICHOLAS CONSTRUCTION SERVICES LIMITED	81	92%
32	MHR INTERNATIONAL UK LIMITED	81	85%
33	KIER PARTNERSHIP HOMES LIMITED	81	70%
34	COCA-COLA EUROPEAN PARTNERS PLC	80	61%
35	RANDSTAD MIDDLE EAST LIMITED	79	100%

The real-life impact: Micro business owners speak out

it’s all too easy to look at the report and think these large businesses don’t affect me. But this late culture is a problem for the whole of the UK. it’s estimated if SME’s were paid on time, the economy could be boosted by 2.5 billion.

I have young children who are going without things they need?

Self-published children’s author, Ellie Jackson, has sold over 7000 books in a year and has over 150 stockists in the U.K. Yet, she has had to take out a loan to pay for more books. I currently have thousands of pounds of outstanding invoices and this is having a huge impact on my ability to reinvest in my business, ” she says. Jackson adds that she has four young children who are going without things they need because of this systemic payments problem.

According to Business Expert, businesses are unable to operate in these conditions. This impacts real people who are struggling to keep a roof over their heads.

View from a micro business: Nicola Simmons, Single Variety Co

Nicola Simmons runs Single Variety Co, a small batch jam business based in’south West London. Her business makes single variety preserves that are sold across the UK in over 100 shops, from small independents to high-end food halls, (and online).

“The main issues that late payment causes (is that)it’s a constant struggle to ensure there is enough money in the bank in order to pay our fixed costs, such as rent and staff. I am having to rely on my customers paying us on time to ensure the money is in the bank to pay out on time. I go without paying myself to make sure this is the case, ” she says.

Late payments from customers also means Simmons can’t grow her business as fast as she’d like.

“I need money in the bank in order to make stock. If our payments are late then we cannot make as much stock as wed like or get discounts for buying in bigger volume.”

Because of this crippling problem, Simmons now asks all new customers to pay their first order upfront, which puts money in the bank. “With our larger customers we ask them to pay within 14 days rather than 30 days to help put the money in the bank sooner.”

Single Variety Co's Nicola Simmons opens up about how chasing payments is a business barrier. — Single Variety Co’s Nicola Simmons opens up about the pain of chasing payments.

The late payment issue has helped her rejig her business model and she aims to grow Single Variety Co’s online sales where the company can get the money within a few days.

“The majority of our customers are very very helpful and want us to succeed, but surprisingly it is the medium-sized customers who are the worst at paying- small independents almost always pay on time, as do the big boys!”

“I have come very very close to refusing to supply one customer who always pays over a month late and I always have to chase, ” she explains. “Ultimately if they pay much later then they are not worth it for me… I lose out due to not having the money in the bank and the time wasted in chasing that I could be using to sell instead.”

View from a freelancer: Jenny Pace

“As a freelancer, I often manage late payments, and it’s a really tricky issue, ” says veteran freelancer and late payments wrangler Jenny Pace. When she started her business in 2014, she didn’t really experience late payment or non-payment, but in the last two years, it’s been a bigger problem.

“In the last six months, late payments have meant that I’ve borrowed money from my husband or asked him to pay bills while I wait for clients to settle up. It’s also meant that I’ve then been delayed in paying suppliers or subcontractors, ” she adds.

“The knock-on effect of becoming a late-payer is the worst: it feels like I’m perpetuating the cycle.”

?(I’m owed over) 1, 000 and with the mortgage payment due on the first, Ive only got 450 in the bank towards the direct debit, says?Rae Radford, a social media consultant who has featured on Good Morning Britain and This Morning. Ive asked and asked and asked but they always say the same thing! You just end up going around and around in circles.

As a way to resolve this, she has tightened up her payment terms and takes more payment up front now. “There are a couple of clients I can’t do that with, but are a huge part of my income, so I’m staying on top of invoicing to make sure they have everything they need to pay me as close to deadline as possible.”

View from a small business supplier: Andy Lawson

At the head of a small business working with SMEs of all shapes and sizes, Andy Lawson experiences first hand the effects of late invoice payments and how the cogs in the wheel grind to a halt.

“Someone not paying us for services, means we struggle to pay suppliers, and so the knock-on effect in the chain continues, ” he says. “I compare it to the house-buying chain. It only takes one delay in the chain to have a huge impact from the top to the bottom.”

To date, Lawson hasn’t used factoring services but it’s been on the table for consideration, he adds. “As a business, we don’t want to be holding up the supply chain but as a small business there is very little you can do. We tried planting a money tree in the office but it didn’t grow.”

Wall of shame: 5 shocking businesses guilty of late payment

WT Film Productions?? The film company behind Bridget Jones’s Diary and The Theory of Everything – Average time to pay invoices is a massive 287 days with 100% being paid late.
E.ON Climate & Renewables UK Humber Wind Limited?? One of the Big Six? energy supplies in the UK – This renewable division pays 63% of invoices late. On average the energy client takes 118 days to make a payment.
Universal Pictures Group (UK) Limited The iconic Universal Pictures has many high-grossing films under their belt. – 68% of their invoices are paid late. On average they take a monstrous 93 days to make payments.
Carlsberg Supply Company UK Limited?– If Carlsberg did invoices they woulddefinitely not be the best in the world. – The Copenhagen beer company takes an average of 92 days to pay invoices with 67% of invoices paid late.
Thomas Cook Group PLC?- The British travel company that gained its fair share of controversy of late – 80% of Thomas Cook’s bills are not paid on time, spending a massive 88 days to pay on average.
Coca-Cola European Partners PLC?- The favoured drinks company – Coca-Cola usually takes 80 days to pay an invoice. More than half of their invoices are not paid on time.

Do your customers default on their payment terms? Share your experience with us for a chance to be featured in Business Advice.

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Business barriers Cash flow Late payment

ABOUT THE EXPERT

Praseeda Nair

Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

Tax & admin Praseeda Nair · 28 September 2018