Payment times: Results from our poll

More than a third of respondents to our payment times survey told us they are waiting longer to be paid now than they were 12 months ago.

Insolvencies have been increasing since 2021 and, in January 2024, reached a five-year peak. 

Late payments threaten businesses’ survival, and the Prompt Payment Code (PPC) was intended to address this threat. But while it does mandate maximum payment times for small businesses, the PPC remains voluntary, with fewer than 400 businesses signed on. 

Earlier this month, we ran a poll to find out Financial Accountant readers’ experiences with payment times. Here are the results.

The main headline: more than a third of respondents are receiving payments more slowly now than they were 12 months ago, with the remainder saying payments are received in around the same timeframe. No one is receiving payments faster now than in 2023.

To hurry payments along, respondents’ businesses have changed reminders, payment methods and deposits. No respondent had made a habit of checking whether new clients are signatories to the PPC, or started offering discounts or other incentives for on-time or early payment. 

The greatest challenges to getting paid on time, respondents told us, include:

• Ensuring the invoice is clear and reaches the correct person promptly
• Haggling after costs are agreed
• Clients questioning work that is already completed
• Clients’ business performance – particularly persuading them to pay if they are making a loss
• Finding the time to chase late payers

More than a third of respondents’ organisations had no staff devoted to chasing up late payments, and another third directed up to half of a full-time equivalent role to the task. 

Respondents identified the industries and business sizes that pay faster and slower, in their experience. Professional, scientific and technical services; and financial services and insurance topped the list of fastest payers. The dubious honour of slowest payers went to health and social care, and retail trade. 

Sole traders were rated the fastest payers, and large businesses/corporations the slowest. 

Late payments reverberate within the business, restricting the organisation’s growth and innovation abilities, and the restrictions carry economic impacts as growth is stifled. No respondent told us they pay staff late, and only 7 per cent said they keep their suppliers waiting. 

Finally, we asked whether respondents had or would report a business’s payment practices or terms. None had done so, but more than one quarter told us they would be comfortable to. 

Read next: Insolvency rates in the UK are at their highest peak since the global financial crisis. These six graphs show which locations and industries are most affected.