Payment Culture in the Mining & Natural Resources Sector
Small businesses in the Mining and Natural Resources sector in the UK face a number of challenges when it comes to receiving timely payments from their clients. This issue has become particularly acute in 2023, as the economic fallout from the pandemic continues to put pressure on cash flows.
One of the main challenges faced by small businesses in this sector is the lengthy payment terms imposed by their clients.
Many large mining and natural resources companies require their suppliers to wait 60, 90, or even 120 days for payment. This can create serious cash flow problems for small businesses, who may struggle to pay their own bills and meet payroll obligations in the meantime.
Another challenge is the sheer complexity of the invoicing process. Many large companies require their suppliers to provide detailed information about their work, including time spent, materials used, and other expenses. This can be particularly challenging for small businesses, who may not have the same level of administrative resources as their larger counterparts.
In addition to these challenges, small businesses in the Mining and Natural Resources sector also face the risk of non-payment or disputes over invoicing. This can be particularly devastating for small businesses, who may rely heavily on a small number of key clients to stay afloat.
For the second year running, Eni Elin/Franklin is in a slow paying league of its own, with invoices being paid in an average of 221 days (down from 251 last year). Cairn Energy Hydrocarbons comes second slowest at 114 days. But there is also good work being done at the opposite end with BP, Esso Exploration and Neo Energy Natural Resources reducing payment times to under a week.