Research reveals an increase in average payment days for small and medium businesses

New research by the campaigning group, Good Business Pays, has revealed the companies with the poorest payment performance in the last six months. 

The Good Business Pays Late & Slow Payment Watchlist Spring 2024 research shows a 20% increase in companies reporting average payment times of over 80 days, with the largest surge in companies reporting payments being made between 80-90 days. Over half of the companies paying on average more than 100 days are those in the manufacturing sector.

However, since the previous report, published in August 2023, there has been a slight decrease in companies reporting average payment times over 100 days (33 to 26). Calling out poor payment performance has led to positive changes. Of the 110 serial late-paying companies identified in August 2023, 19 have made significant improvements to their long-standing poor payment culture and are no longer on the list of serial late-payers.

L&Q New Homes topped the list of the slowest payers list, taking an average of 396 days to pay. Slow payers also include Reckitt Beckinser, Galliard Developments and YouGov, all of which report an average of over 125 days to settle invoices. Over 90 companies are noted as serial late payers, appearing on the late payment watchlist every year since payment reporting was made a statutory duty in 2017. Serial late-payers include Arla Foods, Tata Steel UK, Whirlpool UK Appliances, Jimmy Choo Group and Travis Perkins.

Since the last Good Business Pays Watchlist was published in August 2023, 19 companies have reported big improvements in payment performance and no longer appear on the watchlist. This includes ABB Ltd, which reported late payment scores of 68% last year to 13% now and Samworth Brothers which has gone from paying 67% of invoices late last year to just 7% now.

A spokesperson for the Labour Party responded to the report, saying: “Labour welcomes Good Business Pays’ publication of the Late & Slow Payment Watchlist Spring 2024 report. Small businesses are the backbone of the British economy. For too long, small businesses have been suffering as a result of some bigger firms getting away with short-changing suppliers. Tackling the scourge of late payments would put cash back into small traders’ pockets at a time when many are battling with rising cost demands. Labour understands that small businesses need action on late payments, reform of business rates and support on measures to cut energy bills in order to thrive.”

Liz Barclay, Small Business Commissioner commented: ”I am astonished that any firm thinks that, in a digital age when it’s possible to pay invoices almost instantaneously, it’s acceptable to pay in 90 days never mind 396 or 125. Contractual terms of that length are grossly unfair to a smaller supplier, and to pay late on top of that can amount to rubbing salt into an already fatal wound. We have hundreds of big businesses spending vast sums to update payment systems and support their essential suppliers. We must learn from them and their Boards because when everyone pays quickly and fairly everyone benefits from the economy to wider society and local communities, as well as the businesses themselves.”

Craig Beaumont, Chief of External Affairs at the Federation of Small Businesses, said: “Today’s slow payers join the ranks of serial late payers in a ‘Rogues’ Gallery’ of British corporates paying small businesses on average in months – and one of them, in over a year. Transparency is the first step to change, and we hope that these companies and their clients and customers see them languishing below their competitors, take a good hard look at their sub-par performance and decide to improve. The work by Good Business Pays on the late payments data, provided by the government, is essential reading for anyone with an interest in the ESG agenda.”

Terry Corby, CEO of Good Business Pays added: “It’s encouraging that 19 companies whose names were published in the autumn watchlist have since dramatically improved their payment performance and only six months later now no longer appear on this list. 2023 reported the highest annual registered company insolvencies since 19931, and larger companies must support SMEs, who are the backbone of our economy, and this starts with suitable payment performance.” 

The research, which is published every six months highlights companies with the poorest payment performance, as mandated by the Government’s Payment Practices & Performance Regulations, which requires large companies and Limited Liability Partnerships (LLP) to publish 6-monthly updates on their payment terms and conditions. The latest report covers data from companies that reported payment performance between March 1, 2023, and January 1, 2024.

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