Late payments concern small businesses

06/02/2025 - Business
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Our recent member survey has shed light on the ongoing issue of late payments and their impact on small businesses.

Late payments hit small businesses the hardest, disrupting cash flow, causing stress, and even putting their survival at risk. According to the Small Business Commissioner, UK small businesses are owed an average of £22,000 in late payments - around 18% of their invoices. Chasing these overdue payments takes up an estimated 56.4 million staff hours annually, costing SMEs £6.3 billion. On top of that, the additional financing needed to cover cash flow gaps caused by late payments costs SMEs £684 million each year. 

And it’s the bookkeepers who work hand in hand with small businesses who are the ones who can see the impact – and support them put steps in place to minimise impact.  

 

Our member survey told us... 

  • There’s a widespread impact:Over 60%stated that late payments have negatively affected their business or their clients' businesses in the past 12 months. 

  • There’s a need for government action:Over 70% of participants agreed or strongly agreed that more needs to be done to tackle the problem. And more than two-thirds of bookkeepers surveyed supported making prompt payment a legal requirement for large businesses dealing with smaller enterprises. 

  • More should be done to promote the Fair Payment Code: Despite government efforts to improve payment practices, over 80% of respondents were unaware of the recently introduced Fair Payment Code. 

  • Persistent Payment Delays: In terms of payment timelines, the majority of businesses reported receiving payments within 31-60 days, with only a small percentage being paid within the recommended 15-30 days. 

 

ICB continues to advocate for fair payment practices and urges policymakers to take further action to protect small businesses from the damaging effects of delayed payments. As the conversation around late payments evolves, ICB remains committed to supporting its members and pushing for meaningful change in the financial landscape. 

ICB CEO Ami Copeland commented on the survey "Late payments are a long-standing issue that continue to put unnecessary pressure on small businesses. We’re encouraging our members to take a stand in setting and enforcing payment terms, making sure businesses know they can charge interest, and looking at the role technology can play in making payments smoother and more traceable.” 

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