UK Suppliers refusing orders due to late payments
Late payments damaging business relationships
A survey conducted by Ivalua finds that 6 in 10 UK businesses (59%) said suppliers had terminated their relationships with them due to repeated late payments, and 62% said paying suppliers late had significantly damaged relationships.
Two-thirds of businesses (67%) feared a “global cashflow crisis” would occur if firms continue to pay late.
Stephen Carter, director at Ivalua, said: “Similar to when Covid-19 hit, and now with rising energy bills, the financial strain businesses and suppliers are under means we are facing the risk of another cashflow crisis. Timely payments are critical to gain favour with suppliers, helping to open the door to better collaboration.”
The study also found a third (35%) of businesses had a “severe lack of visibility” into payments, compounded by 58% reporting a disconnect between procurement and finance teams, making it hard to ensure suppliers are paid on time.
This lack of visibility created further problems, with the biggest being an increased risk of fraud (64%), being unable to use payments strategically (50%), and an inability to implement milestone or staged payments (47%).
Carter continued: “As businesses across all industries struggle with rising bills, it’s vital that they work to improve visibility into supplier payments and drive operational efficiencies. Using payments strategically and maintaining a collaborative relationship with suppliers will help businesses to manage a cashflow crisis, even as supply chains come under increasing pressure.”
