Will e-invoicing Really Solve The Late Payments Situation?

Chasing invoices is a headache for most SMEs in the UK. But will the new rules on e-invoicing help matters or just allow the government to steal some “VAT tax owed” in advance of the company actually being paid? Answer on a postcard to A Burnham esq, Number 10 North. Here’s the word from Tungsten Automation; 

UK businesses are struggling with settling invoices on time, with new research from Tungsten Automation, a global leader in intelligent document processing and workflow automation, revealing that £138 million worth of invoices were paid beyond agreed terms in 2026. On average, per company surveyed, £4.9 million worth of invoices were paid later than agreed terms.

Every business analysed (100%) failed to pay at least some invoices within agreed terms, with an average of 17% of invoices paid late.

The analysis reviews publicly available UK Government payment-practices data, covering company submissions filed between January and October 2026. The research also found the following:

• 36% of invoices were paid between 31 and 60 days, on average per company.

• 15% of invoices took 61 days or longer to be paid, on average per company.

• Only 3% of invoices went unpaid due to disputes, on average per company – suggesting that disagreements account for a relatively small proportion of payment challenges.

• Only 18% of companies offer e-invoicing solutions, despite mandates

The findings highlight a disconnect between organisations’ ability to settle invoices on time, and ongoing reforms to invoicing rules to tackle the impact of late payments.

Upcoming rules mandate e-invoicing for all payments, and place a strict 60-day maximum limit on payment terms for large firms paying smaller suppliers, with further plans to reduce this to 45 days. A charge of 8% plus base rate will also become mandatory, when late payments occur, increasing the financial impact of late payments for offending firms.

Despite this, 82% of organisations currently fail to offer any e-invoicing solutions, raising questions about the ability to meet 2029’s deadline and the operational inefficiencies currently contributing to delays, from manual invoice processing to fragmented approval workflows.

Kate Bohn, Finance Industry Consultant, Tungsten Automation says:

“Late payment hits suppliers first, then it spreads. When cash is stuck in someone else’s process, a business cannot plan or invest with any confidence, and that adds up across the whole economy. Some delays have other causes. Plenty start with systems that don’t talk to each other and approval chains that seem to wander through half the building. E-invoicing mandates are on the way, and the late payment charges that come with them will sting, so the companies that start now will be glad they did. Tools that fix this already exist. The sooner they are in place, the less anyone has to chase.”