Pull up your aged debtor report and look at the column headed “days overdue”. Now ask yourself an awkward question. If nearly every account on that list is somewhere between 15 and 30 days past your stated terms, is the report telling you which customers are behaving badly, or is it telling you that your terms were never the real terms in the first place?
Sidetrade published analysis on 8 September 2026 covering more than $930 billion of United Kingdom business-to-business transactions. The finding is short enough to fit in a sentence. UK businesses agree average payment terms of 28 days and get paid, on average, in 50. That is a gap of 22 days, measured across an enormous slice of the actual economy rather than a survey panel.
The United States comparison in the same research is worth holding onto. American businesses run 29-day terms and get paid in 54, a gap of 25 days across $3.6 trillion of transactions. Britain is marginally better on a marginally tighter term. So whatever this is, it is not a peculiarly British failure of commercial manners.
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Why the phrase “late payment” gets in the way
Language shapes what you do about a problem. “Late payment” describes a departure from an expected standard, and it invites a response aimed at correcting individual behaviour: a firmer email, a phone call to accounts payable, a mention of statutory interest.
That framing works when late payers are a minority. It falls apart when the average is 22 days over, because at that point you are not dealing with deviant customers. You are dealing with a market convention that your contract does not reflect.
Businesses respond to a convention very differently from how they respond to misbehaviour. If 50 days is the real cycle in your sector, you have three honest options. Price the credit into what you charge. Shorten the cycle by changing what you offer, through deposits, staged payments or settlement discounts. Or enforce the term you wrote down, consistently, so that your customers learn your ledger is different from everyone else’s.
Most UK businesses take a fourth option, which is to do none of these and complain quarterly. That is the actual problem, and no amount of legislation fixes it, because the Commercial Payments Bill can cap the terms you are permitted to agree without compelling anyone to honour the term they signed.
The chasing problem hiding inside the number
Arjun Singh, Co-Founder and Chief Executive of ezyCollect by Sidetrade, made a remark alongside the data that deserves more attention than the headline figure. As a business grows, collections work grows faster than the finance team, and most of that work goes on chasing accounts that were always going to pay, because there is no reliable way of knowing where to focus.
Anyone who has run a credit control function recognises this instantly. A collector with 400 live accounts and a Monday morning works down the ledger by size, or by days overdue, or by whoever shouted last. Somewhere in that list is the one account that has genuinely changed, and it gets exactly the same standard reminder as the twelve accounts that always pay at day 48 and always will.
The 22-day figure explains why. If the whole population sits three weeks beyond terms, then “days beyond terms” measured against your invoice carries almost no information. It is a constant. Sorting by a constant does not prioritise anything.
A better way to rank the ledger
Measure each customer against its own history rather than against your terms.
Take a customer that has paid at an average of 47 days for the past three years. It is currently at 49 days. Under a conventional aged debtor report it is 21 days overdue and looks alarming. In reality nothing has happened, and every minute spent chasing it is a minute taken from somewhere useful.
Now take a customer that has paid reliably at 32 days for two years and is currently sitting at 44. Under the same report it looks better than the first one, 16 days overdue rather than 21. In reality this is the account that has changed. Something has shifted in that business, and you want to know what it is before its other suppliers do.
Building this is not difficult. Most accounting systems will export payment dates against invoice dates. A rolling twelve-month average per customer, and a simple flag when the current position exceeds that average by more than a set margin, will surface the accounts that matter. The point is not sophistication. It is that a deterioration relative to a customer’s own pattern is a genuine early warning of financial distress, and an absolute number measured against terms nobody in the market observes is not.
What actually shortens the gap
Three levers move the number, and none of them involves chasing harder.
The first is the credit decision itself. If a customer’s payment history sits well outside its sector norm before you have supplied anything, the terms you offer should reflect that. Deposits, reduced limits and staged billing are not hostile. They are how you price risk that you can actually see.
The second is consequence. The Late Payment of Commercial Debts (Interest) Act 1998 gives business creditors a statutory right to interest and fixed compensation on overdue commercial debts, and almost nobody claims it, on the grounds that it might upset the relationship. Whether or not you ever invoice the interest, the customer’s knowledge that you could is worth something. So is a written recoverable costs provision in your terms, which allows you to pass on the cost of third party recovery rather than absorbing it. Without one, every pound you spend on commercial debt collection reduces your own margin on a sale you already made.
The third is timing of escalation. A debt at 60 days that is genuinely undisputed is a very different asset from the same debt at 150 days. Contact details are current, the individuals involved still work there, and the customer has not yet mentally reclassified you as a supplier who never follows through. Whether escalation means a formal demand, instructing a B2B debt recovery agency, a statutory demand or eventually litigation and enforcement, the recovery rate falls steadily the longer the invoice sits.
The point about statutory demands, since everyone asks
A statutory demand is not a collection letter with a hard border. It is a formal step towards a winding up petition, usable where a company debt of £750 or more is genuinely undisputed, and it carries real consequences: 21 days to pay or reach agreement, after which the creditor may petition.
Used correctly against a solvent company that has simply been ignoring you, it is remarkably effective, because directors understand what a petition does to banking facilities and supplier confidence. Used carelessly against a debt the customer disputes on any arguable ground, it can be set aside with costs against you, and you will have converted a commercial conversation into a legal one you are losing.
The distinction that matters is not how angry you are. It is whether the debt is genuinely disputed. If there is a live argument about quality, quantity or scope, litigation or negotiation is the route, and insolvency procedure is not.
Coming back to the 22 days
Nothing in this data suggests UK businesses are in crisis. A 50-day cycle against 28-day terms is uncomfortable and survivable, and the majority of firms have been living with it for years.
What it does suggest is that the credit terms in most contracts are decorative. They describe an intention rather than a practice, and they are enforced selectively, late, and usually only when someone in finance has finally lost patience.
The businesses that get paid faster are rarely the ones with the sternest reminder templates. They are the ones whose terms specify what happens when payment does not arrive, whose escalation happens on a date rather than on a mood, and whose customers have learned, through consistent experience, that the stated term is the actual term.
That is a decision about how you write and apply your paperwork, not about how firmly you chase.
If your current terms and conditions do not let you recover the cost of chasing an overdue invoice, that is the cheapest gap to close first. You can claim our free Recoverable Costs Clause and add it to your existing terms, so that when a customer defaults, the cost of recovering what you are owed sits with them rather than with you.
Downloading our FREE ULTIMATE GUIDE TO DEBT COLLECTION is a good first step. If you want a tailored view on your specific debt, we are happy to give you the straight answer, even if that means advising against legal action. If you’re looking for a partner to step in, you can easily request a transparent quote via our PRICING PAGE.
A short conversation early on can prevent months of delay and avoidable cost later.