Letter to the European Commission (DG GROW) Urging Agreement on the Late Payment Regulation

To: The European Commission, Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW), and the governments of the Member States of the European Union

From: Harpreet Singh, Chair, Cashflow Council, Founders Assembly, Manchester, United Kingdom; Rapporteur, Cashflow Council

Agreement on the Late Payment Regulation

Members of the Commission and representatives of the Member States,

We write on behalf of the Cashflow Council of Reseated’s Founders Assembly to urge renewed agreement on the proposed Late Payment Regulation. Small suppliers need a payment framework that is clear before a contract is signed, reliable after an invoice is issued, and enforceable when payment is overdue. The Council’s position is not that every commercial disagreement can be prevented by a deadline. It is that, once an invoice is undisputed, a buyer should not be able to make a smaller supplier finance an open-ended delay.

We ask the Commission and Member States to return to negotiations with the objective of agreeing a binding, workable regulation. In particular, we ask you to retain a firm maximum payment period, ensure that late-payment consequences take effect without requiring a supplier to pursue a lengthy individual claim, and make payment performance visible. We offer anonymized evidence from our members to assist that work.

1. Who we are and our mandate

Reseated is a global assembly of small-business owners, organized in seven councils. It launched on 10 February 2026 and is a nonprofit. The Cashflow Council examines delayed payment, payment terms, and the effect of cashflow practices on small suppliers. Its work follows a defined process: reports are assessed against a five-part pattern test—Volume, Frequency, Consistency,

Spread, and Corroboration—before a draft response is prepared for consultation and, where appropriate, an Assembly ballot.

The Council’s mandate is to describe recurring practices and propose standards that can be adopted by buyers, institutions, or public authorities. We do not speak for any single company, and the members whose experiences inform this letter are not identified by name or business. Their reports concern buyer-supplier situations across a range of commercial settings. The Council’s records of the evidence for this letter record payment situations and business team sizes, but do not provide a verified sector-by-sector breakdown. We therefore do not attribute counts or conclusions to particular industries.

The Assembly has adopted its Rules of Procedure by ballot. The Council’s work on late payment has included an interim pattern review, certification of the CF-001 pattern test, a draft 15-Day Pay Standard, consultations, and representations to public bodies. These documents are identified in the annex. They provide the institutional record for this letter; the figures below are the Cashflow Council’s internal totals as of 24 September 2026.

2. Evidence before the Council

As of 24 September 2026, the Cashflow Council had 382 members in 49 countries and had received 1,274 reports from 50 countries. The median amount at stake reported by members was approximately US$4,332. During the preceding 30 days, 167 reports had been filed. These are reports submitted to the Council, not a representative survey of all small businesses, and should not be read as a population-wide estimate of late payment.

The reports describe two principal situations in the Council’s classification: 1,032 reports concerned a client paying late, and 242 concerned supplier terms. The Council publishes those categories separately because the timing and leverage involved may differ. In both situations, delayed or restrictive payment arrangements can place financing pressure on a small business, but the report totals alone do not establish the cause or legal status of each individual case.

The following table records the country distribution in the Council’s records. These are counts of reports, not counts of members or businesses. The Council received reports from 50 countries in total; the table lists the eight countries with the largest reported counts in the Council’s records.

The country counts indicate that payment concerns reach members across different national settings. They do not, by themselves, measure the prevalence of late payment in any one country. The Council’s present records do not include a country-by-country denominator, a verified industry classification, or a sector-specific median amount at stake.

For additional context on the businesses represented in the Cashflow Council, 37% of reporting members identified their team size as “Just me,” 42% as 2–9 people, 16% as 10–49, and 5% as 50–249. These proportions describe the reported team-size categories in the Council’s data. They do not imply that every business in a category experiences the same payment practice. They do underline why payment timing

matters to firms with limited capacity to absorb a long gap between delivery and receipt of funds.

The Council’s evidence is consistent with the practical concern that delay can shift the cost of working capital from a buyer to a smaller supplier. That concern is the subject of our policy request, not a claim that each report establishes wrongdoing. A fair framework should distinguish a genuine dispute about an invoice from an undisputed invoice left unpaid, and should allow parties to resolve the former without turning it into a means of postponing the latter.

3. European policy context

The European Commission’s proposed Late Payment Regulation was published in September 2023. The European Parliament set out its position in April 2024. The proposal has since been blocked in the Council, leaving the EU without agreement on the proposed revision. The European Parliament’s legislative record describes the proposal and the course of the file.¹ The Cashflow Council addressed the stalled negotiations in its statement of 22 September 2026, RC/SEC/2026/6.

The EU-wide measure cited by the Council is an average business-to-business payment period of approximately 60.3 days in 2024. That average is not a description of every transaction, and it cannot establish the circumstances of any individual invoice. It does, however, show the distance between ordinary payment experience at that aggregate level and a short, predictable payment cycle for a small supplier.

The Council understands the proposed regulation as seeking a hard 30-day cap. We ask the Commission and Member States to use that proposal as the basis for renewed negotiation rather than allow the file to remain stalled. A defined maximum is important because a payment term is not meaningful protection if it can be extended by agreement without a practical limit, imposed as a condition of access to a market, or avoided through procedural delay after the supplier has performed.

We recognize that a regulation must work across different commercial relationships and legal systems. The Council is not asking public authorities to disregard legitimate invoice disputes or to impose a single administrative process on every business relationship. It is asking for a common floor: a clear outer limit, consequences for late payment, accessible enforcement, and transparent information that allows suppliers and buyers to understand how payment practices operate.

4. Requests to the Commission and Member States

We respectfully ask the Commission, DG GROW, and the governments of the Member States to take the following steps:

1. Resume negotiations on the proposed Late Payment Regulation. Treat agreement on an effective EU framework as an active priority. Publish a clear account of the next procedural steps and the issues requiring resolution, so that businesses and their representative bodies can follow progress without assuming that negotiations have concluded.

2. Retain a firm maximum payment period. Support a binding cap of 30 days as the basis for agreement, as set out in the proposal described in the legislative record. The rule should be understandable at the time a supplier accepts an order and should not allow a stronger contracting party to defeat the cap by requiring a longer term as a condition of doing business.

3. Make the rule effective for undisputed invoices. Ensure that a buyer cannot convert ordinary administrative processing into an indefinite extension. The framework should identify when an invoice is disputed, provide a prompt route for raising a genuine dispute, and require timely payment of any undisputed amount. A supplier should not have to treat silence, repeated requests for documents, or an internal approval process as a new payment term.

4. Provide automatic and meaningful consequences for lateness. The legal consequence of exceeding the permitted period should not depend on a small supplier having the resources to begin a separate, costly claim in every case. We ask negotiators to preserve a clear entitlement to interest and any other applicable late-payment compensation, and to make that entitlement practically usable. Clear default rules would reduce uncertainty for both buyers and suppliers.

5. Ensure enforcement is accessible to small suppliers. Provide a route for raising concerns that is proportionate in cost, time, and complexity to the amounts at stake. An enforcement system should be able to identify recurring non-compliance, protect a supplier from unnecessary exposure when reporting a concern, and distinguish a good-faith invoice dispute from repeated delay after the obligation to pay is clear.

6. Close routes for circumvention. The final text should address arrangements that can make a nominal deadline ineffective in practice, including pressure to accept longer terms, repeated extensions, avoidable invoice-validation delays, and the use of intermediaries or administrative steps to postpone the start of the payment period. The rule should apply in substance as well as in form.

7. Require useful transparency about payment performance. Establish proportionate reporting that allows suppliers, public authorities, and the market to assess whether payment periods are being met. Information should be comparable and understandable, and requirements should be designed so that reporting itself does not impose a disproportionate burden on small businesses. Transparency should make persistent patterns visible without publishing confidential invoice-level information.

8. Provide practical guidance and a review mechanism. Accompany the regulation with plain-language guidance on calculating deadlines, handling partial disputes, applying interest, and using enforcement routes. After implementation, review whether the rules reduce delay in practice, whether suppliers can use them without retaliation or excessive cost, and whether any defined exemptions or exceptions are being used in a way that undermines the framework.

5. Why agreement matters to small suppliers

A payment date is a business condition, not a clerical detail. When a supplier has completed the agreed work and an invoice is undisputed, an extended delay can leave that supplier carrying the cost of labour, materials, tax obligations, and other operating expenses while waiting for revenue already earned. The size of the effect will differ between businesses. The Council’s median amount at stake of approximately US$4,332 and its reported team-size distribution offer a concrete indication of the scale represented in the submitted evidence; neither figure should be treated as an EU-specific estimate.

Small suppliers often have less ability than large buyers to absorb uncertainty or to negotiate a change after a contract has been awarded. A rule that exists only on paper may not alter that balance. A clear cap, prompt consequences, and a usable remedy together can make the agreed payment date more credible. A common EU framework can also make expectations easier to understand for businesses that trade across Member States, while leaving room for national authorities to administer enforcement in ways suited to their systems.

We do not suggest that a payment deadline will resolve every cashflow difficulty, nor that every reported delay is deliberate. The policy question is narrower: when payment is due and the invoice is undisputed, what prevents a buyer from transferring the cost of delay to a small supplier without a timely remedy? The proposed regulation is an opportunity to answer that question with a common and enforceable standard.

6. Offer of anonymized evidence

The Cashflow Council offers to provide the Commission and Member-State authorities with anonymized, aggregated evidence relevant to the negotiations and any later implementation review. Subject to appropriate safeguards, this could include grouped report counts, the classifications used by the Council, and summaries of member experiences that do not identify a person, business, buyer, or confidential commercial relationship.

Any such material would be clearly described as member-reported evidence rather than a representative survey or a finding about a named organization. We would agree the purpose, scope, handling, and publication terms before transferring data. We would not provide identifiable member details or information that would enable a recipient to infer the identity of a business from a particular account. The offer is intended to support careful policy work, not to substitute for official statistical collection or legal assessment.

We would welcome a technical discussion with DG GROW and relevant Member-State officials about what evidence would be useful, how it could be evaluated, and what safeguards would be appropriate. We can also assist with testing draft guidance against the practical situations reflected in our classifications, while keeping members anonymous unless they choose otherwise.

7. Conclusion

We ask the Commission and Member States to return to the proposed Late Payment Regulation and reach agreement on a binding framework that can be understood and used by small suppliers. Please retain a firm maximum payment period, make late-payment consequences effective, establish accessible enforcement, prevent circumvention, and require proportionate transparency. We are ready to contribute anonymized evidence and practical observations to that work.

Annex: Sources and evidentiary basis

A. External source

1. European Parliament, Legislative Train, “Late payments: revision of the Late Payment Directive” (legislative file and status).¹

B. Reseated records

• RC/CF/2026/N.1, Interim pattern review: late payment to small suppliers, 14 May 2026.

• RC/CF/2026/N.2, Certification of the pattern test for CF-001, 23 June 2026.

• RC/CF/2026/L.1, Draft resolution: the 15-Day Pay Standard, 21 July 2026.

• RC/SEC/2026/6, On the stalled EU Late Payment Regulation, 22 September 2026.

• Cashflow Council internal data extract as of 24 September 2026: 382 members in 49 countries; 1,274 reports from 50 countries; median amount at stake approximately US$4,332; country counts, situation classifications, team-size categories, and reports in the preceding 30 days as set out above.

C. Notes on interpretation

The internal figures are counts of members and reports submitted to Reseated, not estimates of the prevalence of late payment among all businesses. Country figures refer to report origin as recorded in the internal data. The Council’s internal data extract contains no sector-by-sector report totals or sector-specific medians; this letter makes no such claims. The external EU average is an aggregate business-to-business payment measure for 2024 and is not presented as a measure of the Council’s members or of any individual transaction.

Notes and sources

1. https://www.europarl.europa.eu/legislative-train/theme-a-europe-fit-for-the-digital-age/file-late-payments-directive-revision ↩

Sources

1. European Parliament, Legislative Train: Late payments—revision of the Late Payment Directive