Late payments can be a nightmare for any business, but there are ways to keep a grip on cashflow pressures from implementing the 5-15-30 model to better monitoring, segmenting customers and reviewing client contracts, explains Jonathan Barber, executive director of the Institute of Financial Accountants
One of the most persistent and harmful issues SMEs face in 2025 is late payments. So much so, in fact, that former UK Small Business Commissioner Liz Barclay’s session on late payments at the recent IFA conference was one of the most popular of the day.
Despite various efforts over the years – voluntary codes, awareness campaigns, digital tools – the problem is not going away. If anything, it’s becoming more entrenched, with SMEs and micro-businesses the most vulnerable, despite underpinning the UK economy.
Accountants, whether in-house or in practice, are often the first to raise the red flag. They see when invoices go unpaid for months, manage cashflow gaps, and even advise clients who are forced to take out high interest loans just to cover payroll because a key customer has dragged their feet.
