UK late payment culture shows signs of improvement

The data compiled by the global e-invoicing provider shows that the time from invoice submission on its network to payment has steadily improved since 2016, coinciding with the UK Government requiring larger businesses to start reporting their payment practices in April 2017.

Figures also show the UK is performing much better than the rest of the Europe with payments being made in 42 days on average versus 52 days on the continent but lags one day behind the US. In producing the data, Tungsten Network has analysed more than 19 million global transactions involving 100,000 businesses that have passed through its e-invoicing platform since 1st January 2016.

Of the transactions analysed, 19.4% of the 1.69 million payments made to UK suppliers have been from FTSE 100 companies, which take on average 42 days to pay UK suppliers, the same as the current overall average for the UK.

Further analysis of the data shows that Mexico tops the list of the most improved countries, with its suppliers waiting on average 51 days to be paid, 35% quicker than compared to 2016. The data also shows an improvement for China, where on average it takes 57 days for suppliers to be paid, a 32% decrease.

Analysis of the UK Government’s payment practices data shows of the 5,812 larger businesses having reported their payment practices to the UK government to date, only 9% have signed up to a recognised payment code such as the government-backed Prompt Payment Code.

The UK Government payment practices data also reveals that the average large business in the UK pays 32% of their invoices later than stipulated in the agreed terms with suppliers.

Further afield, Tungsten Network’s data reveals that suppliers in Europe (excluding the UK) have to wait on average ten days longer to be paid than the UK, and 11 days longer than the US. Meanwhile businesses in Italy, where its government will require a digital stamp on all invoices to help enhance tax revenues, take 60 days on average to be paid. An expected consequence of the Italian government’s move in January 2019 could be that it shortens the time it takes companies to pay suppliers.