Key facts
- Late payments cost the UK economy £11 billion annually.
- SMEs wait an average of 27 days to be paid.
- Late payments hinder SME investment in new technologies.
- Late payments hinder SME investment in digital transformation.
- The SME sector is experiencing overall growth despite payment issues.
Late payments represent a substantial financial drain on the UK economy, with an estimated annual cost of £11 billion. This persistent issue disproportionately affects small and medium-sized enterprises (SMEs), which are currently waiting an average of 27 days to receive payments for goods and services rendered. The resulting cashflow problems are a significant impediment to these businesses' ability to invest in vital areas such as new technologies and digital transformation initiatives. Despite these considerable financial headwinds, the SME sector as a whole is demonstrating continued growth. The average payment period of 27 days means that businesses are not receiving funds in a timely manner, creating a ripple effect that can stifle innovation and expansion. This situation persists even as the broader economic landscape for SMEs shows signs of upward momentum.