Nearly half of UK companies are paid late with worst offenders US and China paying past the average 45-day payment terms
Overall 43% of UK invoices sent abroad were paid after the typically agreed 45-day payment terms from completion of work or delivery of goods.
US companies topped the table in 2019 as the worst late payers taking 96 days, including the agreed 45-day payment term, up from 58-days late in 2018.
About half (53%) of US invoices were paid late with an average value of £40,115, according to analysis by invoice factoring provider Market Finance.
In second place was China which took 56 days to settle invoices, unchanged from the previous year. However, late payment was the norm for 84% of Chinese companies. The average value of late invoices was £37,176.
German firms were the next worst offenders. Not only did the number of invoices paid late double between 2018 and 2019 (from 36% to 71%) but delays in settling bills doubled from 59 to 77 days late.
The average value of late payments was £38,563 with 71% of German companies paying after the agreed term.
The most improved country was Belgium which bucked their ideas up and reduced their number of late payment days from 121 in 2018 to 63 in 2019.
Bar this improvement, Belgium still slot in at number four for the worst late payers with half of their invoices paid late at an average value of £45,558.
In fifth place was Spain with an average of 60 day late payments, down from 69 the previous year. Almost three quarters (71%) of Spanish companies paid late invoices which had an average value of £21,264.
Payment rates improved in some countries as French, Spanish and Italian businesses on average halved the number of days they paid late from 70 days late in 2018 to 35 days in 2019.
Invoices sent to Irish companies were the largest in value, typically worth £60,379. However, the number of invoices paid late doubled from 25% in 2018 to 52% in 2019, averaging 57 days for late payments down from 63 in 2018.
Bilal Mahmood, external relations director at Market Finance, said: ‘there are ways for businesses to fight back against the negative impact of late payments, from having frank discussions with debtors that continuously fail to adhere to agreed payment terms, to imposing sanctions on those debtors, or seeking out invoice finance facilities to bridge the gap.’
Market Finance’s analysis reviewed 11,348 invoices sent by UK SMEs to companies in different countries between 2013 and 2019.
Although the typically agreed term between companies is 45 days, UK law recognises 60 days as the maximum limit under the Prompt Payment Code.
This means that the US, Germany and Belgium have all broken this code by paying invoices past the 60-day deadline.
