This is the first in a two part post explaining why the solution to the issue of late payment in the UK is not just a technical one.

An industry is steadily growing up to help suppliers in the UK navigate the issues related to late payment of commercial debts.

The current batch of tools and services available to suppliers to help tackle the problem can be divided into two categories, those that deal with the issue before it arises and those that deal with it after it has arisen.


  • Credit reference agencies
  • e-invoicing solutions


  • Debt collection agencies
  • Invoice factoring
  • Invoice financing
  • ‘Going legal’


The data speaks for itself

BACS debt data

Source: BACS

The data above from BACS shows that the issue of late payment isn’t abating. While it fluctuates it has yet to show a sustained drop and even if it does, £30bn is a long way to go down.

Added to which the BACS data is a conservative estimate with ABFA indicating the figure could be as high as £67bn and Zurich suggesting as high as £255bn. Indeed the ABFA figures show a steady increase since 2011 with no sign of the issue easing.

The data therefore shows that in spite of all the current tools and services on offer for suppliers to use the impact has yet to be meaningful.


Everybody keeps talking about a shift in mindset…

Most people now agree that what is really needed is a significant change in mindset. However, while some think this change needs to come from the customer / large organisation, TLPD believes that in addition it also needs to come from the supplier.

An example of this is highlighted by an anecdote we recently learned of in which a supplier providing goods to a major, retailer submitted an invoice and was only paid part of it. Upon enquiring the retailer explained that they had run a BOGOF on the supplier’s product and that the terms of the contract (which both parties agreed to) stated that such offers would be paid for by the supplier. This resulted is what might loosely be defined under the heading of late or non payment but in fact, while arguably a borderline ethical practice, it was entirely legitimate.

The reason why the supplier was caught out by this was because they had not adequately read the terms of their contract. This is not necessarily the fault of the customer.

As such the change in supplier mindset we are talking about here relates to suppliers accepting a greater level of responsibility and taking more control over their cashflow.

Update: Part two of this post can be read here.