According to MarketFinance Business Insights, small and medium-sized enterprises (SMEs) are experiencing greater delays in receiving payments, with the average length of time doubling from 12 days to 23 days over the past year.
The latest analysis revealed that these invoices were also typically larger in value (£34,286) than those paid on time (£24,624).
UK businesses tend to agree on 45-day payment terms from completion of work or delivery of goods.
In 2019, almost 39 per cent of invoices were paid late (£34 billion), which is a small improvement from 2018 where 43 per cent of invoices were paid late.
The six-year study found that larger debtors insisted on longer payment terms (49 days) than smaller debtors (37 days). Moreover, when invoices were paid late, these larger debtors also settled much later (94 days) compared to smaller debtors (42 days).
Bilal Mahmood, External Relations Director at MarketFinance said: “It’s great to see that fewer invoices were paid late in 2019 but worryingly, those that were paid late took twice as long as in 2018.
“SME owners have come to expect long payment terms, but late payments are inexcusable. For every day an invoice is late, it’s more time spent chasing payment. This means less time for business owners to focus on growing their business, coming up with innovative ideas and hiring more people. Things need to change quickly.”