Invoice payment statistics show a gap between agreed terms and actual cash flow. In the United States, 80% of small firms faced a customer-payment challenge in the 2023 Small Business Credit Survey. In the UK, 27% of SME employers said late payment was a problem in 2024. Recent UK estimates put the amount owed in late payments at £26 billion at any given time.
Contents
- How common trade credit and late payment are
- Invoice terms and actual customer payment timing
- Late-payment exposure by business size
- How businesses pay supplier invoices
- The financial cost of late payments
- How businesses respond to unpaid invoices
- Large-business payment performance in the UK
How common trade credit and late payment are
Trade credit is the practical foundation of many business-to-business invoices: a supplier delivers goods or services and receives payment later. The share of businesses offering it varies sharply by sector and country, so the figures below should be read within their stated measurement periods.
The Federal Reserve’s 2024 Report on Payments, based on the 2023 Small Business Credit Survey and published in December 2024, found that 80% of small firms faced a challenge related to customer payments. This is a US survey result, not a measure of all businesses worldwide.
The UK government’s Longitudinal Small Business Survey 2024 found that 47% of UK SME employers gave customers trade credit in 2024. Among those offering trade credit, 57% considered late payment a problem. Across all UK SME employers, including those that did not offer trade credit, 27% regarded late payment as a problem.
Sector differences were substantial. Trade credit was offered by 77% of UK SME employers in manufacturing and 76% in transport and storage. The comparable shares were 10% in accommodation and food, 13% in finance and real estate, 17% in arts and entertainment, and 23% in health. Among businesses that gave trade credit, late payment was considered a problem by 75% in education and 67% in professional and scientific activities.
These results describe reported business experience rather than the value of invoices outstanding. A high incidence of payment problems does not, by itself, establish that a sector has the largest unpaid balance.
Invoice terms and actual customer payment timing
Agreed payment terms commonly center on a 30-day invoice cycle, but actual payment timing is more varied. The UK government’s late-payments research executive summary, from a survey conducted in 2023–2024 and published in 2024, reported the following customer-payment figures.
| Customer payment measure | Share of businesses |
|---|---|
| Standard terms of 30 days after invoice date | 54% |
| Standard terms within 7 days | 11% |
| Customers most commonly paid 30 days after invoice date | 31% |
| Customers most commonly paid within 7 days | 13% |
| Customers paid 60 days after invoice date | 8% |
| Customers paid within contractual terms | 52% |
| Customers took longer than contractual terms | 36% |
| Customers paid more quickly than contractual terms | 12% |
Business size affects the short-term pattern. Standard terms within seven days were offered by 22% of micro businesses, compared with 11% overall. Twenty-nine percent of micro businesses said customers most commonly paid within seven days, versus 13% overall. At the long end, 8% reported customer payments 60 days after the invoice date; this rose to 17% in the goods sector.
Payment method did not eliminate longer waits in the survey. Five percent of businesses accepting credit cards and 5% accepting debit cards reported customer payments 60 days after the invoice date, compared with 8% overall. The figures measure reported timing and payment practices; they do not show whether a particular payment method caused faster or slower settlement.
The central distinction is between contractual timing and observed timing. Just over half of businesses with business customers said customers paid within contractual terms, while more than one-third said customers took longer. That difference is important for cash-flow planning because an invoice can be contractually valid yet still arrive later than the seller expects.
Late-payment exposure by business size
The UK’s 2025 late-payments survey, with fieldwork from 15 January to 7 February 2025, separated overdue invoices from payment terms longer than 60 days. Both issues affected 12% of micro businesses, 21% of small businesses, 35% of medium businesses, and 59% of large businesses.
| Business size | Overdue invoices and/or terms over 60 days | Overdue invoices only | Terms over 60 days only | Neither issue reported |
|---|---|---|---|---|
| Micro | 12% | 6% | 1% | 80% |
| Small | 21% | 12% | 5% | 58% |
| Medium | 35% | 11% | 3% | 49% |
| Large | 59% | 4% | 3% | 33% |
The categories are not a ranking of financial harm. Large businesses reported the highest combined exposure, but smaller firms can have less cash available to absorb a delayed payment. The same survey found that 1% of micro businesses, 3% of small businesses, 1% of medium businesses, and 0% of large businesses answered “don’t know” about these overdue-invoice or over-60-day-term issues.
The business-size figures also show why “late payment” needs a precise definition. An overdue invoice is different from a long agreed term, and a business may experience either one or both. The survey’s combined measure includes both conditions rather than treating them as identical.
How businesses pay supplier invoices
Invoice payment is two-sided: a business may be waiting for customer cash while also managing its own supplier obligations. The same UK government research found that 71% said their suppliers’ most common contractual payment time was 30 days after the invoice date. Four percent overall were required to pay within seven days, rising to 10% among micro businesses. In construction, 14% were required to pay within 60 days, compared with 6% overall.
Actual supplier-payment timing was different from the contractual picture. Forty-nine percent said they paid suppliers 30 days after the invoice date. Eleven percent paid within seven days, including 23% of micro businesses, while only 4% of medium businesses and 0% of large businesses did so. Seventeen percent of services businesses and 25% of businesses mainly paying suppliers by debit card paid within seven days.
Overall, 72% paid suppliers within the typical contractual time, 10% took longer, and 18% paid early. Micro businesses and services businesses each reported early supplier payment at 27%. Nineteen percent of small businesses reported taking longer than the contractual time.
Sector comparisons also varied: early supplier payment was 27% in services versus 9% in goods, while late supplier payment was 12% in pharmaceuticals versus 0% in insurance. These are survey percentages for the stated 2023–2024 research period, not universal sector benchmarks.
The volume of late supplier invoices was generally limited for most respondents: 81% said less than 10% of supplier invoices were late. The mean late share was 7%, including 10% in goods and 5% in services. A mean is an average across respondents, so it should not be read as the typical result for every individual business.
The financial cost of late payments
The UK government’s 2025 economic-impact research reported research estimates using 2024 business-population data. Among affected businesses, average current late payments rose in cash terms with business size, while the balance represented a smaller share of annual turnover.
| Affected UK business size | Average current late payments | Share of annual turnover |
|---|---|---|
| Micro | £9,214 | 4.61% |
| Small | £52,081 | 1.47% |
| Medium | £193,635 | 0.79% |
| Large | £703,479 | 0.23% |
Across affected businesses, the estimated average current late-payment balance was £17,085, equal to 0.95% of annual turnover. The estimates are not observed invoice totals for every business; they are research estimates for the stated 2025 analysis.
At economy level, UK businesses were estimated to be owed £26 billion in late payments at any given time. Late payments were estimated to cost the UK economy almost £11 billion per year. More than 1.5 million UK businesses, or 28% of businesses, were estimated to be affected each year.
The turnover percentages show the pressure on smaller firms particularly clearly in relative terms. The reported average for affected micro businesses was 4.61% of annual turnover, compared with 0.23% for affected large businesses. This comparison does not mean every micro business faces the micro-business average, and it does not convert the estimates into a forecast for a particular company.
How businesses respond to unpaid invoices
Late invoices consume time as well as working capital. In the UK 2025 survey, 22% of businesses said they spent staff time chasing unpaid debtors during the prior year. Seven percent commissioned a debt-collection agency, and 8% started legal proceedings against a customer because of late payments during that prior year.
The economic-impact research estimated that affected businesses spent an average of 86 staff hours chasing late payments per year. At economy level, that was estimated to equal about 133 million hours. The hours are an estimate for affected businesses and the wider UK economy, not a time requirement attached to each invoice.
The same research estimated that late payments contributed to 14,000 UK business closures per year, equivalent to 38 businesses per day. This is an estimated contribution, not a claim that every closure was caused solely by late invoices. The distinction matters because business closures can have multiple causes, while the research quantifies late payments’ estimated contribution.
For small-business readers, the figures point to two separate exposures to track: the value of customer invoices that are late and the staff time required to recover them. A low percentage of late supplier invoices does not necessarily offset a high-value customer balance, and a high number of small invoices does not necessarily equal the largest cash exposure.
Large-business payment performance in the UK
The UK government’s Large businesses’ payment practices and performance statistics 2025 provides a separate view of large businesses. The average reported time for UK large businesses to pay invoices fell from 35 days in 2018 to 32 days in 2025. In 2025, the regional range was 27 days in London to 38 days in both the East Midlands and West Midlands.
The share of large-business invoices paid late by number fell from 25% in 2018 to 15% in 2025. In 2025, late invoices represented 15% by number and 14% by value. Number and value are different measures: a 14% value share does not imply that every late invoice was 14% of the same size.
Industry and regional results remained uneven in 2025. Manufacturing large businesses reported 21% of invoices paid late by number and 21% by value. Construction reported 14% late by number and 13% by value, while financial and insurance businesses reported 12% by number and 11% by value. The West Midlands had the highest regional late-payment rates, at 19% by number and 18% by value.
These large-business statistics describe reported performance for the UK reporting year 2025. They should be kept separate from the SME survey results and the economic-impact estimates because the populations, measures, and reporting periods differ.