Letter from the table: what a late invoice took from me

To the Cashflow Council

I support the 15-Day Pay Standard. I am writing because I have lived through the space between finishing work and being paid for it, and because that space is not empty. It fills with calculations, reminders, postponed plans and the quiet worry that you may be doing everything right and still not have enough cash when a bill falls due.

In February this year, I completed a piece of contracted work for a large buyer. The agreed fee was £6,400. I sent the invoice on 3 February, with the work completed and the amount set out clearly. The payment terms were 60 days. I had checked them before accepting. At the time, I told myself that a large organisation would be predictable: the work was done, the paperwork was in order, and I could plan around the date.

That confidence lasted until the due date passed. On 6 April, I checked my account in the morning and the money was not there. I wrote to the accounts-payable contact, attached the invoice again and asked whether anything was missing. I did not receive a clear answer that day. A few days later, I followed up. I was told the invoice was in the system and that payment was being processed. I had no reason to believe the invoice was disputed, but I still did not know when the money would arrive.

By then, the delay had become a practical problem. My own rent and software bills did not wait for the buyer’s payment run. I had set aside money for tax, and I did not want to use it for ordinary expenses and then have to rebuild it later. I moved £1,200 from my personal savings into the business account to cover immediate costs. I delayed replacing a piece of equipment I rely on and asked a supplier whether I could pay their invoice a week later. That was the part I found hardest: I was asking someone smaller than the buyer to absorb a delay they had not caused.

The payment arrived on 29 April, 23 days after the due date. The £6,400 eventually came through, but that amount does not describe the cost of waiting. I spent time checking the account, composing reminders and deciding what could safely be postponed. I had to keep a reserve tied up for longer than planned. I also paid £34 in bank charges and interest after a short-term balance ran higher than I had expected. The largest cost was the uncertainty: I could not make a sensible decision about taking on another commitment until I knew when the first one would be paid.

I considered whether to claim statutory late-payment interest. In the UK, qualifying business debts can carry statutory interest at 8% above the Bank of England base rate, and fixed compensation may also be available. But knowing that a right exists is not the same as feeling able to use it. When a buyer is much larger than you, you may worry that pressing a claim will make future work less likely. I did not want to turn a routine invoice into a confrontation. So I followed up politely and waited. That choice was mine, but the imbalance behind it was real.

The Late Payments Bill introduced in the House of Lords in May is an important step, but it is a proposal, not a rule already in force. It would set a 60-day maximum payment term, provide for mandatory interest and give the Small Business Commissioner adjudication and fine powers. Those measures matter. The Council’s proposed standard asks for something stronger: payment within 15 days for an undisputed invoice, automatic interest when payment is late, and publication of payment times.¹

Fifteen days would have changed the shape of my episode. It would not have made every process perfect, and it would not remove the need for a fair way to raise a genuine dispute. But once the invoice was accepted as undisputed, I would have had a clear, short period to plan around. I would not have had to treat a 60-day term as normal and then wonder whether the actual payment date was still further away. Automatic interest would mean I did not have to choose between asserting a right and preserving a working relationship. Published payment times would give small suppliers information before they agree to terms, rather than leaving each of us to learn the buyer’s habits alone.

I know buyers have their own systems and approvals. A standard should not pretend that every invoice is simple or that every delay is deliberate. The point is to make the ordinary case work fairly: a complete invoice, no genuine dispute, and payment on

time. If there is a dispute, it should be raised promptly and specifically. If there is not, the small supplier should not have to finance the buyer’s operations by waiting.

Notes and sources

Sources

1. Small Business Commissioner, Late Payments Bill: what it could mean for your business