It’s a problem which affects many smaller insurance brands, insurtechs, data suppliers and more- late payment, or worse still non-payment. But how can you minimise the risk? Some thoughts here;
Late payment remains one of the biggest threats to SME survival, costing the average small business £22,000 a year in lost income and forcing around 50,000 companies to close annually. Yet the root cause is not always a lack of money – it’s often avoidable admin failures, disorganisation or poor payment culture.
New data provided by Novuna Business Cash Flow, a leader in SME and corporate cash flow finance, shows that late payments often stem from predictable, preventable issues.
Top causes of non-payment:
Many late payments aren’t down to cash flow struggles – they’re caused by simple, avoidable issues that keep invoices stuck unpaid for weeks. These are the top reasons payments go unpaid:
- “No response” – 20% of overdue invoices are simply ignored, even after follow-up attempts. This can be a sign of poor internal processes – or deliberate stalling tactics.
- “Still in customer approval process” – 15% of delays happen because the invoice hasn’t been signed off internally, despite the work being done.
- “Copy requested” – 12% of cases involve customers asking for the invoice again, often well after it was first sent. This may be disorganisation – or a way to reset the clock on payment terms.
- “Slow payer” – 7% of customers are repeat offenders who routinely exceed agreed payment windows.
These four reasons alone account for more than half of all late payments reported – and many are signs of poor payment habits that can be fixed.
The UK’s slowest paying industries
On top of this, Novuna Business Cash Flow’s own data shows that payment culture varies widely by sector. Manufacturing, transport, and admin services remain among the worst for paying invoices on time, with average Days Sales Outstanding (DSO) well above 50 days. In contrast, education stands out for consistently paying within 30 days.
Practical steps to get paid faster – and when to get extra support
While some payment delays are out of SMEs hands, many can be prevented with stronger invoicing processes, better follow-up and a clear plan for when to escalate.
Here are five practical steps SMEs can take:
- Confirm PO requirements upfront – A missing purchase order is one of the top admin reasons for delayed payment. Always check if one is needed and include it clearly.
- Log hours and pricing as you go – Waiting until the end of a project creates errors and disputes. Track in real time so you can invoice quickly and accurately.
- Send invoices promptly – Delaying your invoice only delays your payment. Invoice as soon as the work is done.
- Follow up consistently – Silence can be a tactic. Professional reminders and statements keep your invoice top of mind.
- Know when to escalate – If chasing payments is eating into time and resources, outsourcing credit control can help.
John Atkinson, Head of Commercial and Strategy, Novuna Business Cash Flow, said: “Cash flow issues can often begin with late payments – but they’re frequently rooted in breakdowns we can prevent. By tightening processes, SMEs can close the gap between doing the work and being paid.”
For many businesses, managing late payments and credit control in-house is time-consuming and uncomfortable – especially with repeat offenders. Outsourcing to a credit control service can take the pressure off, offering:
- A dedicated team to manage follow-up
- Professional, relationship-sensitive communication with customers
- Better visibility of cash flow and improved forecasting
- Less internal admin stress and time wasted chasing unpaid invoices
By tackling avoidable admin issues, staying consistent on follow-up, and bringing in extra support when needed, SMEs can close the gap between delivering work and getting paid – protecting their cash flow and peace of mind.
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