Impact of Late Payments on the UK Economy in 2024: Insights from Bank of England SEC Codes

We generally talk about late payments across the board, However what is the impact when broken down in to sectors.

As we know Late Payments are the bane of every business, but what are the main contributors of this?

So lets firstly look at each sector as listed by the Bank of England SSEC Codes.

Agriculture, Forestry, and Fishing

• Impact Value: £0.3 billion in delayed payments
• DSO (Days Sales Outstanding): 55 days
• Main Contributors: Large agribusinesses and food processors delaying payments to small-scale farms due to volatile market conditions and increased input costs

• Manufacturing
• Impact Value: £1.5 billion in delayed payments
• DSO: 65 days
• Primary Contributors: Automotive and electronics manufacturers face supply chain issues and high energy costs, which delay payments to smaller manufacturers and parts suppliers.

Construction

• Impact Value: £1.8 billion in delayed payments
• DSO: 75 days
• Primary Contributors: Large construction firms delaying payments to subcontractors and material suppliers due to project funding uncertainties and cost overruns.

Wholesale and Retail Trade

• Impact Value: £1.1 billion in delayed payments
• DSO: 55 days
• Primary Contributors: Major retail chains delaying supplier payments to manage cash flow amidst declining consumer spending and inflationary pressures.

Transport and Storage

• Impact Value: £0.6 billion in delayed payments
• DSO: 60 days
• Primary Contributors: Large logistics companies delaying payments to subcontracted transport services due to rising fuel costs and operational challenges.

Accommodation and Food Services

• Impact Value: £0.8 billion in delayed payments
• DSO: 50 days
• Primary Contributors: Hotel chains and large restaurant groups delaying payments to food suppliers and service providers due to fluctuating demand and high operating costs.

Information and Communication

• Impact Value: £0.7 billion in delayed payments
• DSO: 45 days
• Primary Contributors: Large IT and communication firms delaying payments to smaller tech suppliers and service providers due to increased operational expenses and cybersecurity investments.

Financial and Insurance Activities

• Impact Value: £0.4 billion in delayed payments
• DSO: 40 days
• Primary Contributors: Insurance companies and financial institutions delaying payments to third-party service providers due to economic uncertainties and regulatory compliance costs.

• Impact Value: £0.9 billion in delayed payments
• DSO: 50 days
• Primary Contributors: Large consulting and engineering firms delaying payments to subcontractors and smaller consulting firms due to project delays and funding issues.

How Pecunia 2016 Can Help

Pecunia 2016 addresses the critical issue of late payments, which can significantly harm SMEs across various sectors. Here's how Pecunia 2016 can support your business:

1. Real-Time Monitoring and Alerts

Pecunia 2016 offers real-time tracking of outstanding invoices and sends automated alerts for upcoming and overdue payments. This keeps you constantly aware of your payment status, allowing for proactive measures to avoid late fees.

2. Streamlined Invoicing Processes

Our tool simplifies invoicing with customisable templates, automated generation and dispatch, and seamless integration with accounting software. This reduces administrative burdens and speeds up the billing process.

3. Enhanced Cash Flow Management

Pecunia 2016 provides insights into payment patterns and cash flow forecasts, helping you plan finances more effectively and allocate resources efficiently.

4. Improved Credit Control

The software includes robust credit control mechanisms, allowing you to assess the creditworthiness of clients before extending credit terms, thereby reducing the risk of late payments and defaults.

5. Dispute Resolution Support

Pecunia 2016 manages payment disputes with a clear and documented trail of communications and transactions, simplifying the resolution process and promptly settling disputes.

6. Reporting and Analytics

Our detailed reporting and analytics capabilities provide insights into your financial health and payment behaviours. Use this data to identify trends, improve financial practices, and negotiate better client payment terms.

By adopting Pecunia 2016, SMEs can significantly reduce late payments, enhance financial resilience, and foster healthier business relationships. This contributes to a more stable and robust economy, mitigating the overall impact of late payments across sectors.

For more information or to get started, contact us at info@pecunia2016.co.uk.