SMEs owed £66,770 in unpaid invoices as late payments rise

James Salmon, Operations Director, Friday 10th April 2026.

Late payment problem worsens for UK SMEs

New research from Bibby Financial Services shows that UK SMEs are now owed an average of £66,770 in unpaid invoices — a 10% increase year-on-year.

That figure alone is worrying, but it’s only part of the story.

  • 62% of SMEs say customers are taking longer to pay
  • 19% admit delaying payments themselves to preserve cashflow
  • A third have written off nearly £30,000 in the last year

This is not just a late payment issue anymore — it’s a cashflow chain reaction.

When businesses delay payments, the whole system weakens

The findings suggest something more concerning than simple financial pressure.

Some businesses are now deliberately slowing payments to protect their own position.

That creates a domino effect:

  • One company delays paying suppliers
  • Those suppliers delay paying theirs
  • Cashflow tightens across entire supply chains

The result? A system where late payment becomes normalised, and risk spreads quickly between otherwise healthy businesses.

This is the Late Payment Culture!

The hidden cost: bad debt and insolvency risk

Late payment is one problem. Bad debt is another.

When invoices go unpaid entirely, the impact is far greater:

  • Lost revenue cannot be recovered
  • Margins are eroded
  • Additional sales are needed just to stand still

With a third of SMEs already writing off significant sums, many are quietly absorbing losses just to keep trading.

How much business will you have to do to cover the cost?

At the same time, insolvencies remain elevated — meaning the risk of non-payment is not just theoretical, it’s happening every day.

Slow Payers: The Hidden Costs Draining UK Businesses

£11 billion cost to the UK economy

Government data reinforces the scale of the issue:

  • Late payment costs the UK economy £11 billion annually
  • 38 businesses close every day due to cashflow pressures
  • Business owners spend 86 hours a year chasing invoices

That’s time not spent growing the business, winning new customers, or improving operations.

Government action – but will it be enough?

New measures have been announced to tackle late payment, including:

  • Powers to fine persistent late payers
  • A proposed 60-day cap on payment terms
  • Mandatory interest on overdue invoices

These are positive steps. But legislation alone won’t fix behaviour overnight.

Late Payment Crackdown: Tough New Laws… But Will They Work?

Businesses still need to actively manage their credit risk and collections process.

External pressures are making things worse

Global events are adding further strain.

Supply chain disruption — such as shipping delays through key trade routes — is increasing costs and extending delivery times.

That pressure feeds directly into:

  • Higher prices
  • Longer payment cycles
  • Increased insolvency risk

For many SMEs, it feels like pressure is coming from every direction at once.

What this means for your business

If you trade on credit, these trends matter.

  • Your customers may be under pressure
  • Payment delays may be intentional, not accidental
  • The risk of bad debt is rising
  • Cashflow is becoming harder to predict

In this environment, doing nothing is the biggest risk of all.

How CPA helps you stay in control

At CPA, we see these patterns every day — and we help businesses deal with them early, professionally and effectively.

With CPA membership, you can:

  • Check customer creditworthiness before you trade
  • Monitor changes in financial status
  • Act quickly on overdue invoices
  • Recover payments without damaging customer relationships

Our approach is simple:
Improve cashflow while protecting the relationships your business depends on.

That’s why most debts referred to our Overdue Account Recovery service are resolved before they become write-offs.

Our overall resolution rate is around 82% to 84% but when our members use us promptly, passing accounts to us within a few weeks of the invoice becoming overdue we see resolution rates within days above 95%.

Don’t let unpaid invoices become bad debt

Late payment is rising.
Bad debt is rising.
And businesses are increasingly protecting themselves — sometimes at your expense.

The earlier you act, the better your outcome.

Talk to CPA today and take control of your cashflow before delays turn into losses.

Call 020 8846 0000 (business hours) or email PaidQuick@cpa.co.uk today.

When you see your money come in, you will be so glad you used CPA.

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.

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