Terry Corby, Founder & CEO, Good Business Pays
April 2025
In comprehensive analysis carried out by Ernst & Young (EY), the latest insights from the UK’s government-mandated Payment Practices Reporting (PPR) regime show an encouraging downward trend every year since 2021. This is particularly encouraging to me, as Good Business Pays started our campaigning work in 2021 and have worked hard, alongside many others to bring improvements in payment culture to the UK business landscape.
The latest insights show a cautiously optimistic trajectory: big businesses are, on average, paying their suppliers more promptly. While challenges remain—especially in sectors like materials, pharmaceuticals, and retail—there’s a clear shift toward improved payment behaviours across industries.
Drawing on data collected from over 5,000 businesses between June 2021 and December 2024, this EY report explores the major trends, sectoral differences, and the role of digital innovation in shaping supplier relationships.
Key Metrics Show Consistent Improvement
Three primary metrics are used to assess payment performance:
1. Average time to pay
2. Percentage of invoices not paid within agreed terms
3. Percentage of invoices paid more than 60 days late
Across all three, a consistent and measurable improvement has been noted over the past three years:
– Average time to pay fell from 37 days in June 2021 to 34 days in December 2024.
– Invoices paid outside agreed terms dropped by 4.7 percentage points.
– Invoices paid after 60 days fell from 14.0% to 11.6%, a 2.4-point drop.
Interestingly, the sharpest gains occurred between June 2023 and December 2024, suggesting that recent initiatives—whether policy-driven or reputational—are finally taking effect.
Who’s Behind the Improvement?
The report identifies two main contributors to the positive trend:
1. New Reporters: Firms newly required to report their payment data appear more compliant, possibly due to better digital invoicing systems or an increased awareness of reputational risk.
2. Consistent Reporters: Companies that report consistently over multiple periods also show steady improvement. These firms—about 65% of all reporters—are not just meeting baseline expectations but often outperform their peers in all three key metrics.
On-Time Reporting Equals Better Performance
A notable correlation emerges: companies that file their reports on time perform significantly better in payment practices than those that report late.
– On-time reporters had an average time to pay of 33.4 days (Dec 2024)
– Late reporters averaged 37.0 days—a 3.6-day lag
Roughly 25-30% of companies continue to submit reports late, a figure that has held relatively steady over the observed period. However, the performance gap between timely and late reporters suggests a cultural and operational divide—one likely rooted in internal discipline and digital maturity.
Sectoral Breakdown: The Good, the Bad, and the Improving
Top Performers:
– Banks: Industry-leading average time to pay of 18 days
– Diversified Financial Services, Insurance, and Utilities: All below 30 days
– Construction: Strong across all metrics, driven in part by government oversight
Underperformers:
– Materials & Household Products: Poorest performers in all three metrics
– Automobiles, Pharma, and Food & Beverage: Continue to struggle with payments over 60 days and delays beyond agreed terms
Notable Improvements:
– Aerospace & Defense: Average time to pay reduced by 3.4 days in H2 2024
– F&B: A 4.1% decrease in invoices paid outside agreed terms, although average time to pay slightly increased
Deep Dives: Aerospace & Defense and Food & Beverage
Aerospace & Defense:
– 43% of companies in this sector improved average time to pay between June and December 2024
– Some, like GE Aircraft Engine Services, showed improvements of up to 17 days
– The sector also saw a decline in reports of extremely long payment times (>70 days)
Food & Beverage:
– Mixed results: while % of late payments fell, average time to pay increased slightly
– Some firms (e.g., Heineken UK and McCormick UK) significantly improved timeliness on agreed terms, but also saw a rise in absolute days to pay
This divergence hints at a shift in negotiated payment terms, rather than just operational efficiency—perhaps suggesting suppliers are tolerating longer timelines in exchange for reliability.
E-Invoicing: A Double-Edged Sword?
Around 27% of reporting companies now offer e-invoicing, a number that has remained steady over the years. Interestingly:
– Companies using e-invoicing report a higher average time to pay (~3.9 days longer than those who don’t)
– However, they also record a lower percentage of invoices paid outside agreed terms
This may reflect more structured and transparent terms enabled by digital workflows. Suppliers are kept in the loop, even if payments are on longer cycles.
Reporting Participation Stabilises
After a steady decline from December 2019 through 2022, the number of reporting companies has stabilised since late 2022. The drop—an 11% decrease representing over 700 fewer reporters—may be due to exemptions, mergers, or enforcement gaps.
Now, around 5,189 companies report each cycle. This provides a fairly robust base for longitudinal analysis but also signals the need for continued vigilance to maintain participation levels.
What This Means for UK Businesses
The data tells a cautiously encouraging story. UK businesses, spurred by public accountability and internal process improvement, are gradually becoming better payers. Yet, disparities persist:
– Sector-specific laggards need tailored guidance and, potentially, policy nudges.
– On-time reporting should be further incentivised to correlate better performance with responsible governance.
– Digital transformation—especially e-invoicing—should be viewed as a lever for transparency rather than just efficiency.
Looking Ahead
The Payment Practices Reporting regime is proving its worth. Transparent data, publicly available via the UK Government portal, is driving behavioural change—especially where reputational risk matters most. Campaigns like our own at Good Business Pays, have played and continue to play an important role in driving this culture change in business. The evidence is clear to see in this anaylsis.
To accelerate progress:
– Government and industry bodies might explore more innovative incentives for timely payers.
– Firms should invest in digital systems and training to ensure timely, compliant reporting.
– Larger buyers must remain accountable, especially in sectors like retail, manufacturing, and pharmaceuticals, where delays most acutely impact small suppliers.
In a business landscape where trust and resilience are critical, how you pay your suppliers speaks volumes. These latest trends suggest more UK firms are starting to listen—and act accordingly.