UK SMEs operating across the retail sector are spending the equivalent of almost a full year waiting to be paid, as late payments continue to place mounting pressure on cash flow across supply chains and the wider small business economy.

New research from Hiscox surveying 1,000 sole traders, small business owners and directors, found that SMEs are chasing an average of 14 late payments each year, equating to 331 days of cumulative waiting time.

Almost a quarter of payments arrive late, reinforcing the scale of a problem many businesses now identify as their biggest financial challenge.

Late payments were cited as the primary cashflow issue by 58 per cent of respondents, rising to 63 per cent among businesses employing between 10 and 49 staff.

The findings suggest the issue intensifies as companies grow, with larger SMEs typically chasing higher volumes of overdue invoices and larger outstanding sums.

Many businesses reported being owed between £1,001 and £10,000 annually in late payments, with estimates suggesting tens of billions of pounds could be tied up in overdue invoices across the UK each year.

For smaller suppliers operating within retail supply chains, delayed payments can restrict investment, slow hiring decisions and increase reliance on credit during key trading periods.

The findings come as the government attempts to address the issue through the updated Fair Payment Code, introduced in January 2025 to encourage faster payment practices and improve transparency around how quickly businesses pay suppliers.

For retailers, the research sheds light on the growing importance of payment practices in maintaining resilient supply chains, as late payments continue to shift from an operational frustration to a structural risk for smaller businesses.

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