Interim pattern review: late payment to small suppliers

Subject: Interim pattern review: late payment to small suppliers

1. Purpose and status

1. This note records an interim review of reports concerning late payment to small suppliers. It applies the five-part pattern test—Volume, Frequency, Consistency, Spread and Corroboration—to the Cashflow Council evidence recorded on 14 May 2026. It is an assessment of the material then recorded, not a finding about any named buyer, sector, jurisdiction or individual member.

2. The review is intended to make the Council’s reasoning inspectable: it states the working threshold used for each test, identifies the evidence counted, and records what the evidence does and does not establish. Thresholds in this note are provisional operational rules for this interim review. They are not adopted standards of the Founders Assembly and do not replace the Rules of Procedure, RC/A/2026/2.

3. The review covers a defined problem pattern, not a single company. Members’ reports are treated as evidence of reported experience. They are not assumed to be audited invoices, adjudicated disputes or proof of a legal breach. The Council’s calls for evidence and the evidence already recorded, including RC/CF/2026/S.1, form part of the process record.

2. Method and evidence base

4. The Cashflow Council record as of 14 May 2026 comprises 152 Council members from 39 countries and 436 reports from 46 countries. The reports concern two recorded situations: a client paying late and supplier terms. The Council also records team size, the countries contributing the highest report counts, and the number of reports filed in the last 30 days.

5. The unit counted for the volume test is a report, not a member, invoice or distinct buyer. A member may have submitted more than one report; Council records do not identify the number of unique underlying transactions or counterparties. For frequency, the trailing-30-day count is used as a measure of recent reporting activity. It is not presented as a rate of late payment across all small-business invoices.

6. For consistency, the recorded situation categories are compared with the total report count. The calculation indicates whether reports cluster around a recurring payment problem; it does not establish that every report describes the same contractual or legal circumstances. For spread, the review uses the reported number of countries, without treating country count as a measure of equal prevalence or representative coverage.

7. Corroboration is assessed separately from the volume and geographic breadth of member reports. In this note, that test asks whether the reported pattern is supported by independent evidence that can be compared with the member reports, such as a relevant administrative dataset or a documented validation exercise. General recognition of late payment as a policy problem is contextual evidence, but is not counted as validation of these specific reports.

8. The findings below distinguish recorded figures from measures that are not assessed in this review. They do not infer unrecorded measures.

3. Working thresholds and findings

9. To make the interim decision reproducible, the Rapporteur applies the following working thresholds. They are deliberately stated here rather than implied after the results. A test is marked met only when the recorded evidence reaches the threshold as defined; otherwise it is marked not met or, where relevant, not assessable.

3.1 Volume

10. The threshold is 100 reports. The recorded total is 436, exceeding that threshold. The volume test is therefore met. The result establishes that the Council has received a substantial set of reports for review; it does not establish 436 distinct buyers, 436 separate invoices, or a population-wide incidence rate. The reporting unit and the underlying transaction unit must remain distinct in any later analysis.

3.2 Frequency

11. The threshold is 100 reports within the preceding 30 days. The Council recorded 184 reports in the last 30 days, so the frequency test is met. This is evidence of continuing reporting activity during the recorded period. Because Council records provide no daily counts, calendar-month totals or historical time series, the result cannot show whether reporting is rising, falling or stable over time.

3.3 Consistency

12. The threshold is that at least 70% of reports fall within one recurring recorded situation relevant to the pattern. Of 436 reports, 360 are classified as “client-pays-late” and 76 as “supplier-terms.” The first category accounts for approximately 82.6% of the total (360 divided by 436). On this classification, consistency is met.

13. The category “supplier-terms” remains relevant to the wider cashflow agenda, but it is not merged with “client-pays-late” to make the dominant category appear larger. The recorded labels do not describe the detailed circumstances behind each report. The finding is therefore about a repeated reported situation, not a conclusion that all 360 reports involve identical terms, causes, durations or remedies.

3.4 Spread

14. The threshold is reports from at least 10 countries. The Council’s record identifies reports from 46 countries. The spread test is met. This demonstrates geographic reach within the Council’s reporting record. It does not establish that the reports are evenly distributed, that all regions are represented in proportion to their small-business populations, or that the record represents all businesses in any country.

3.5 Corroboration

15. The threshold requires evidence independent of the member submissions and sufficiently comparable to support the reported pattern. It is not met on the basis of this interim review. The Council has report counts and categories, but no independently checked review of invoices, matched payment-record dataset, or other comparable source testing the member reports themselves.

16. External policy material provides context, not a substitute for that validation. The UK Government’s response to its late-payment consultation records the issue as a subject of public policy consideration.¹ The European Parliament’s legislative tracking page describes the proposed revision of the EU late-payment framework and the legislative process around it.² These sources do not measure the Council’s reports or independently verify their

underlying transactions. They are therefore not counted toward the corroboration threshold.

17. The wider importance of micro, small and medium-sized enterprises is also relevant to the Council’s remit: the United Nations reports that MSMEs account for around 90% of businesses, 60–70% of employment and around 50% of GDP worldwide.³ The ILO describes MSMEs as accounting for about 70% of employment worldwide and notes that around 80% operate in the informal economy.⁴ These are assembly-wide contextual facts, not evidence that the reported payment experiences are representative or independently confirmed.

4. Evidence tables

4.1 Reports by country

18. The Council’s country counts list eight countries with 262 reports in total. The other 174 reports are recorded across 38 countries, calculated as the difference between the total of 436 reports from 46 countries and the listed country counts. The country-by-country allocation of those 174 reports is not recorded in this note.

4.2 Reports by region

19. The Council’s report record identifies 46 countries. This review assigns no report counts to regions because the regional aggregation is not recorded here.

4.3 Reports by situation

20. The situation categories sum to the recorded report total. The share for “client-pays-late” is approximately 82.6%; the share for “supplier-terms” is approximately 17.4%. Percentages are calculated from the recorded counts and rounded to one decimal place.

4.4 Reports by team size

21. Team-size figures are recorded as percentages. The categories sum to 100%. Counts by team-size category are not reported here.

4.5 Reports by month or reporting period

22. The Secretariat record gives a cumulative total and a trailing-30-day total. The last-30-days count is included within the total and must not be added to it. The table preserves that distinction.

5. Limitations

23. The dataset is a member-reporting record, not a probability-based survey of small businesses. Members choose whether to join, report and provide information. The figures may reflect awareness of the Council, the timing of its call for evidence, members’ willingness to report, and differences in access to the reporting process. The data cannot support a claim about the prevalence of late payment among all small suppliers.

24. The Council’s aggregate records do not identify unique submitters, unique buyers, transaction values, invoice dates, agreed payment terms, dispute status, payment dates or the duration of delay. The median amount at stake is recorded separately as approximately US$4,710; the Council’s records do not connect that

figure to individual reports or explain its calculation. It is not used to determine any of the five test results.

25. Country counts establish where reports were recorded, not where buyers are located or where the relevant transactions occurred. The difference between 152 Cashflow Council members from 39 countries and 436 reports from 46 countries is not a contradiction: reports and members are different units, and the Secretariat record does not link each report to a member’s country.

26. The categories are useful for identifying a recurring reported situation but remain broad. Without report-level coding notes or a review of underlying documentation, the Council cannot assess whether members applied the categories consistently. Nor can the note infer motive, financial capacity, deliberate conduct or legal liability on the part of any buyer.

27. The comparison with public policy sources is limited. A consultation, legislative proposal or general statement of the economic importance of MSMEs may show that late payment is a recognized policy concern, but it does not corroborate individual reports in this dataset. The Council should not describe those sources as verification of the 436 reports.

6. Interim conclusion and next steps

28. On the working thresholds stated in this note, four tests are met: Volume, Frequency, Consistency and Spread. Corroboration is not met. The evidence therefore supports an interim finding that late payment to small suppliers is a recurring and geographically broad issue within the Council’s submitted reports, but it does not complete the five-part pattern test under the present method.

29. This conclusion is limited to the evidence recorded on 14 May 2026. It does not authorize a claim that the pattern has been established for all small suppliers, nor does it attribute conduct to any named company or buyer. It also does not determine the merits of any individual payment dispute.

30. The next review should preserve the separation between report counts and verified transactions. Where members choose to provide supporting records, the Council should record what was checked, how it was checked, what information was withheld or redacted, and whether the check confirms only a transaction detail or supports the wider pattern. Participation should remain voluntary, and members should not be asked to disclose a business name publicly.

31. The Rapporteur recommends that the Council maintain a versioned evidence register; retain the recorded categories while documenting any coding changes; collect calendar-period totals in future reporting; and seek a complete, privacy-conscious country and regional breakdown. Any future comparison with external data should specify the geography, period, population and definition of late payment, and should explain why the comparison is sufficiently like-for-like.

32. The five tests should be rerun when material additional evidence is recorded. Any subsequent recommendation to draft a fix should follow the Assembly’s stated process: reports, pattern review, draft, public consultation, Assembly ballot, and letters to the CEOs able to adopt the relevant practice. This note makes no recommendation on the content of a standard and records no response by any official or company.

Sources

1. UK Government, “Late payment consultation: time to pay up — Government response.”
2. European Parliament, Legislative Train, “Late payments directive revision.”
3. United Nations, “Micro-, Small and Medium-sized Enterprises Day.”
4. International Labour Organization, “Micro, small and medium-sized enterprises.”

Notes and sources

Sources

1. UK Government, Late payment consultation: time to pay up — Government response

2. European Parliament, Legislative Train: Late payments directive revision

3. United Nations, Micro-, Small and Medium-sized Enterprises Day

4. International Labour Organization, Micro, small and medium-sized enterprises