Pandemic leads to rise in late payments

The pandemic has caused late payments to escalate, with nearly half the value of B2B bills being paid late and businesses reporting being hit by revenue loss.

This is according to findings from the recent Atradius UK Payment Practices Barometer, which has found that since the onset of the Coronavirus pandemic, the proportion of late payments has increased.

The data shows that UK businesses report 47% of the total value of invoices are paid late; this is a significant increase of 81% compared to pre-pandemic levels when 26% of invoices by value were paid late. Nearly half (45%) of businesses also now report waiting an average of 20 days longer to turn overdue invoices into cash (this was 14 days last year).

James Burgess, Head of Commercial for Atradius UK, commented, “The Covid-19 pandemic arrived at a time when the business community in the UK was already working hard to accommodate the challenges and uncertainties posed by Brexit. For some industries, such as retail and automotive, the lockdowns and disruptions to supply chains have added further stress to sectors that were already grappling with structural challenges, such as migration towards online shopping and electric vehicles respectively.

“While the Barometer indicates a degree of optimism within the business community, the next six months present a critical time for firms across all sectors. While uncertainty surrounding the progression and consequences of the pandemic continue to weigh heavily we are also now close to December 31^stand the end of the Brexit transition period. Businesses will need to be prepared for further challenges and take steps to protect their receivables while also seizing opportunities to trade and grow.”

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com