A recent study has revealed concerning statistics for small and medium enterprises (SMEs) in the UK. According to the study, a record number of UK companies have been paying their invoices late, leaving SMEs £109 billion out of pocket. These findings come despite new procurement rules that were put in place in 2025, requiring government contractors to pay their suppliers within 45 days.

The study, conducted by a leading business finance company, looked at the payment practices of over 1.7 million UK businesses. It found that a staggering 60% of UK companies paid their invoices late in 2025, with an average delay of 23 days. This is a significant increase from 2019, where only 53% of companies were found to have made late payments.

This worrying trend has left many SMEs struggling to stay afloat. The delayed payments have caused cash flow problems for these businesses, leading to missed opportunities for growth and potential business closures. The £109 billion in overdue payments is a huge blow to the UK economy and has raised concerns about the financial stability of many SMEs.

The new procurement rules, which were introduced by the government to support small businesses, require all government contractors to pay their suppliers within 45 days. The intention behind these rules was to ensure timely payments for SMEs and improve their cash flow. However, it seems that these rules have not been enough to prevent late payments from occurring.

The study also found that the construction and retail industries were the worst offenders when it came to late payments. In fact, construction companies accounted for a staggering £26 billion in overdue payments, while the retail sector was responsible for £17 billion. These two industries are crucial for the growth of SMEs, and the delayed payments have a severe impact on their ability to operate successfully.

Despite the concerning findings, there is still hope for SMEs. The study also revealed that there has been a decrease in the average number of days it takes for payments to be made, from 23 days in 2025 to 21 days in 2020. This suggests that companies are becoming more aware of the impact of late payments and are taking steps to improve their payment practices.

Furthermore, the study highlighted that larger companies have a more significant impact on the delay of payments. The top 5,000 companies in the UK are responsible for almost 50% of the overdue payments, showing that the issue is not only limited to SMEs but also involves larger corporations.

The government has promised to take action and address the issue of late payments. This includes stricter enforcement of the procurement rules and potential penalties for companies that consistently fail to pay their suppliers on time. It is crucial for the government to follow through with these measures to ensure that SMEs are not being taken advantage of by larger companies.

However, it is not just the responsibility of the government to tackle this issue. It is also essential for companies to take responsibility for their payment practices and ensure that suppliers are paid on time. The success of SMEs is vital for the growth of the UK economy, and timely payments are crucial for their survival.

In conclusion, the record level of late invoice payments in the UK is a concerning issue that needs to be addressed urgently. SMEs are the backbone of the UK economy, and their financial stability should not be compromised due to delayed payments. The government, along with companies, must work together to improve payment practices and ensure that SMEs are not left out of pocket. Only then can we see a thriving economy where SMEs can reach their full potential.