THE time large businesses take to pay their suppliers has decreased, new government data published today shows, but almost a pound in every seven continues to be paid late, which business owners and accountants say can put firms in an impossible position.
In 2025, the Department for Business & Trade (DBT) revealed large businesses paid their suppliers in 32 days, unchanged from 2023 and 2024, but down from 35 days in 2018.
The proportion of invoices paid late by large businesses has been steadily decreasing, too. In 2025, large businesses paid 15% of invoices late, a 1% decrease from 2024 and down from 25% in 2018.
However, new figures available for 2025 show that, last year, 14% of the total value of invoices was paid late by large businesses, which equates to almost one pound in every seven.
The data revealed large businesses in the ’Manufacturing’ sector have consistently had the longest payment times and among the highest proportions of invoices paid late, compared with other sectors.
Meanwhile, large businesses in London have consistently had the shortest payment times and among the lowest proportions of invoices paid late, compared with other regions.
In 2025, large businesses submitted 11,178 valid reports, a 6.5% decrease from 2024. This, the DBT said, reflects a change in the scope of the reporting requirements, which reduced the number of businesses meeting the size thresholds for reporting in 2025.
Harvey Dhillon, CEO at Zmartly, a small business accountants, welcomed the data but said more needs to be done and urged firms to agree payment terms in writing.
He said: “The headline is genuinely good news, namely large firms now pay in 32 days on average while late invoices are down from a quarter to 15% since 2018. But an average can keep falling while your own invoice sits unpaid.
“The figure that stands out is the new one: 14% of the total value of invoices was paid late. That is close to a pound in every seven and, for a small supplier, it is rarely a small sum. It is often the biggest invoice of the month.
“The firm that feels it is the small manufacturer or subcontractor at the end of the chain, still paying its own staff and VAT on time while the money it is owed sits with a much larger customer. Being owed money is not the same as having it, and that gap is how a profitable business runs out of cash.
“The useful part is that this data is public. Before you take on a big customer, check their payment record, agree your terms in writing, and chase from day one, not day 60.”
Ed Rimmer, CEO at Manchester-based Time Finance, said “the UK has been trying to legislate its way out of a late payment crisis for nearly three decades, and this improvement is really positive”.
He continued: “For the UK’s 5.7 million SMEs, we still have a way to go. The introduction of the new Small Business Protections Bill marks the latest, and arguably most forceful, attempt to break the deadlock.
“In the lending and commercial finance sector, we know all too well how overdue this intervention is. Late payment acts as a structural drag on SMEs’ growth, trapping vital funds that should be used for investment.
“The issue of late payment is so deeply rooted in business culture. If we want real change, the Government and corporate boards must stop reviewing prompt payment as a tick box exercise and start treating it as a core piece in rebuilding the UK’s economy.”
Matthew Knight, Chief Freelance Officer at Freelancing.Support, said “this is hugely positive news”.
He continued: “In the past 12 months, Emma Jones, the government’s Small Business Commissioner, has been doing amazing work including getting new laws to come down harder on late paying businesses to be put through the house.
“However, large businesses are only a portion of the problem – and many freelancers and small businesses still face days endlessly chasing late and unpaid invoices. We cannot let this good news slow down the good fight.”
Samuel Mather-Holgate, Managing Director at Swindon-based Mather and Murray Financial, said “calling this data progress is setting the bar on the floor”.
He added: “A 32-day average payment time may look better than 2018, but for small firms it can still mean wages, rent and tax bills falling due before cash arrives.
“15% of invoices paid late is not a rounding error, it is a working capital crisis being pushed down the supply chain. Large businesses often have the balance sheets to absorb delays. Their suppliers usually do not.
“Late payment is not just poor admin, it is interest-free borrowing from smaller companies that can least afford it. The fact manufacturing remains worst affected should worry ministers, because those are exactly the firms we say we want to invest, hire and grow.”
Nouran Moustafa, Practice Principal at Roxton Wealth, said “the direction of travel is positive, but 15% of invoices still being paid late is not a victory lap”.
She continued: “For a large business, a delayed invoice may be an admin issue but, for a small supplier, it can mean wages, VAT, rent or stock cannot be paid on time.
“Late payment effectively forces smaller firms to provide an interest-free loan to businesses with far greater financial strength. It damages cash flow, increases borrowing costs and can stop otherwise healthy companies from hiring, investing or taking on new work.
“Thirty-two days may be better than 35, but suppliers should not have to chase money they have already earned.”
