Late payments: Easing one of the biggest burdens on growing businesses

For far too many, late payments are more than a frustration — they drain cash flow, block investment and can erode the confidence of business owners trying to grow. For finance leaders, delayed income can mean difficult trade-offs: paying staff or suppliers, holding back expansion, or taking on costly credit just to stay afloat. In an economy built on small and medium-sized businesses, this burden is a systemic problem.

For businesses, late payments are a strategic barrier to growth, directly impacting their ability to invest, hire and scale. In collaboration with the UK Government, we partnered with Opinium to research the impact of late payments on the UK economy. The resulting report, 'Late Payments Research – Estimating the Total Economic Impact on the UK Economy', published by the government, reveals a systemic problem: over 2.2 million businesses are affected.

This isn't sustainable. The solution requires action on multiple fronts: stronger enforcement of payment terms, cultural change around prompt payment practices and better tools to help businesses manage cash flow proactively rather than reactively. 

Technology also has a role to play, helping businesses automate invoicing, predict payment patterns and identify potential problems before they escalate. The ultimate aim should be moving from a system where businesses spend dozens of hours chasing money they're owed to one where payment processes are predictable and efficient.

According to the Late Payments Research, late payments continue to drain productivity and profitability:

• 56.4 million staff hours lost each year chasing unpaid invoices

• On average, an SME spends 71 hours annually pursuing late invoices

• Worth an estimated £6.3 billion to the UK economy each year

• Average SME writes off £32,185 annually due to late or unpaid invoices

• 1 in 3 SMEs say late payments put them at risk of closure

The impact is strategic, not just operational:

• Growth decisions are delayed while teams manually consolidate reports

• Departmental silos create friction between sales, delivery and finance

• Cash-flow forecasting becomes guesswork without real-time data integration

• Compliance risks increase as manual processes can’t scale with regulation

Technology cannot solve cultural issues alone but it can remove avoidable friction. Digital platforms now help firms send and track invoices automatically, offer simple payment options and maintain clear audit trails. As AI becomes more embedded, it will forecast cash flow more accurately, surface early-warning signs of late payment and help leaders make confident, data-driven decisions.

For finance managers, accountants and CFOs, the gains go beyond time saved. Integrated systems create a single view of performance — linking payments, forecasting, payroll and reporting. When everything is connected, teams no longer spend days reconciling figures or chasing data from other departments. They can use those hours for what really drives value: scenario planning, pricing strategy and investment analysis.

This is where artificial intelligence (AI) and human intelligence (HI) combine most effectively. AI can handle pattern recognition while humans bring strategic oversight and judgement to decide how to act. Together, they create capacity and clarity. The AI lifts the administrative burden; the human ensures the right decision follows.

That partnership restores control. It means finance professionals can spend less time reacting to uncertainty and more time steering the business. For growing firms, this can be the difference between surviving a tight month and using that same cash insight to fund a new opportunity. When teams are supported by reliable data and intelligent systems, every decision — from investment timing to supplier negotiations — becomes faster and better informed.

Late payments may never disappear entirely, but with smarter systems, transparent practices and empowered finance teams, businesses can protect liquidity and grow with confidence. By fusing AI efficiency with human intelligence and oversight, we can remove one of the biggest obstacles facing the UK’s growth-stage businesses and free them to focus on what they do best — creating value, jobs and innovation.

Source: Intuit QuickBooks and Opinium, “Late Payments Research: Estimating the Total Economic Impact on the UK Economy” (HM Government publication).