Late payments to UK businesses have soared over the past year, squeezing companies' cash flow, according to new research.
EU-based firms took 30 times longer to settle invoices from UK companies in 2017 compared to 2016, data from business finance company MarketInvoice revealed. Invoices were paid an average of 9.1 days late, and the proportion of bills settled tardily by EU firms rose from 40.4 per cent to 73 per cent.
Similarly, the number of days that US firms took to pay invoices in 2017 rose from 7.1 days beyond the payment terms to a massive 19.5 days. The proportion of bills paid late rose from 45.7 per cent to 71 per cent.
“UK exporters are being squeezed globally as more of their invoices are being paid late and taking longer to be settled. Businesses respect long payment terms, but late payments are unacceptable,” said MarketInvoice's Bilal Mahmood.
“The new trading environment in 2017, with Brexit negotiations ongoing against the backdrop of global economic uncertainty, could have caused some consternation amongst late-paying firms around the world. This is not an excuse to not honour their payment terms."
German firms were the guiltiest parties regarding late payments, taking 28 days on average to settle bills with UK firms. A year previously they were repaying 0.5 days early, and had almost half the number of late payments.
Read more: Meet the firm which hopes to solve the late payment problem
UK firms were not exempt from late domestic payments either. In 2017, companies in the country paid 66 per cent of invoices to their peers an average of 18.4 days late.
MarketInvoice's research looked at 80,000 invoices issued by UK businesses sent to 93 countries. Overall 62 per cent of invoices issued by small and medium-sized enterprises, worth more than £21bn, were paid late.
Read more: The UK’s late payments culture is the worst in the world – we owe it to SMEs to tackle it
