MarketFinance reveals worst countries for late payers

Companies in the United States and China have been highlighted as the worst late payers as research reveals foreign businesses who bought goods and services from UK firms in 2019 paid more invoices late and took longer to settle their bills.

The latest MarketFinance Business Insights report examined more than 11,000 invoices from UK firms to so-called top trading partners in the post-Brexit world and found 43 per cent were paid late in 2019, up 30 per cent on a year before.

The analysis suggests that businesses typically agree 45-day payment terms from completion of work or delivery of goods.

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However, invoices were actually settled 17.6 days beyond these payment terms in 2019, an increase from 2018 when the delay was 16.2 days.

Overall, US companies were the worst late payers, taking an extra 51 days to settle invoices from agreed terms in 2019, up from 13 days late in 2018.

Additionally, more invoices were paid late, up from 40 per cent in 2018 to 53 per cent in 2019.

China was the second worst, with 84% of invoices sent to Chinese businesses paid late, the highest amongst all countries.

This has increased from 57 per cent in 2018, although the number of days taken to settle an invoice beyond the agreed terms remained consistent at 11 days.

In Europe, German firms were the worst offenders.

Delays in settling bills doubled from 14 to 32 days late.

French, Spanish and Italian businesses halved the number of days they paid late from 24 days late in 2018 to 12 days in 2019.

“The US-China trade war and Brexit uncertainty in 2019 haven’t helped to create a harmonious global trading environment for UK businesses,” Bilal Mahmood, external relations director at MarketFinance, said.

“Indeed, it’s quite possible we’ve lost ground as negotiators on the world stage. An impression which has seeded its way to industry.

“Whilst trade with the US and China has increased, these insights will be valuable to UK businesses who are selling their goods and services abroad.

“It will help them plan their cash flow and working capital needs. 2020 will be a pivotal year as the government negotiates new trade deals globally.

“Business owners will be hoping for swift and favourable arrangements as they plan for growth and look for new markets to launch into. In the meantime, there are ways for businesses to fight back against the negative impact of late payments, from having frank discussions with debtors that continuously fail to adhere to agreed payment terms, to imposing sanctions on those debtors, or seeking out invoice finance facilities to bridge the gap.”

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