Late payment can turn a profitable sale into a cashflow problem. A business may have completed the work, paid its employees and suppliers, and accounted for tax before the customer settles the invoice.
The scale of the problem remains significant. Research commissioned by the Department for Business and Trade and the Office of the Small Business Commissioner estimates that late payments cost the UK economy almost £11 billion a year. Around £26 billion is owed to businesses in late payments at any one time, affecting more than 1.5 million businesses, or 28% of the business population. Among businesses affected, the average amount outstanding is approximately £17,000.
The same research estimated that 14,000 businesses close each year because of late payments, while affected businesses spend an average of 86 staff hours a year chasing overdue invoices.
Payment performance has improved in some parts of the economy. The latest Department for Business and Trade statistics, published in July 2026, show that large businesses paid suppliers in an average of 32 days during 2025. They paid 15% of invoices late, compared with 25% when reporting began in 2018.
For SMEs, good cashflow management therefore starts before an invoice becomes overdue.