Managing late payments

UK businesses – and the government – have spent decades trying to shame each other into paying faster. Payment codes, league tables, the Duty to Report. The results speak for themselves: late payment remains endemic.

The reason is structural. Current payment infrastructure makes delaying the rational economic choice. Invoices travel as email attachments through systems that cannot talk to each other, and a 30-day term means nothing when the invoice lands in the wrong inbox or sits in an approval queue nobody owns.

Travis Perkins extended supplier payment terms after introducing a new finance system that standardised terms across the group. The change effectively pushed some payments close to 90 days and improved their working capital, which drew criticism from suppliers. It is a pattern repeated across industries – systems drive behaviour, not the other way around. Finance leaders who want to get cash in faster need to stop treating this as a behaviour problem and start looking at the plumbing underneath it.

The hidden friction inside B2B payments

Most B2B payment processes were never designed to work end to end. Invoices are generated in one system, approved in another, paid through a separate rail and reconciled somewhere else entirely. Much of that journey still runs on emails, PDFs, spreadsheets and repeated manual entry –  yes, still, in 2026.

Once an invoice leaves the building, visibility vanishes. Nobody knows whether it arrived, who has it, or where it sits in the approval chain. Staff changes compound the problem because an invoice sent to someone who has moved roles or gone on leave can sit untouched for weeks before anyone notices, and when it finally surfaces the chasing starts again from scratch.

Invoice interception fraud thrives in this environment too, with fraudsters intercepting PDF invoices, changing the bank details, and forwarding them on without anyone being the wiser. Businesses have lost tens of thousands of pounds to fraudsters exploiting exactly this weakness. Safeguards like Confirmation of Payee help, but they are not infallible – they catch some fraud at the point of payment, not the underlying process gaps that make it possible in the first place. Every one of these failures is the predictable result of a process built on disconnected parts.

What connected infrastructure changes

The answer is not another bolt-on tool. Fragmented, point-to-point workflows need replacing with shared infrastructure that connects the full process of paying and getting paid. When invoice, approval, payment and reconciliation run through a single connected flow, the friction points that cause delay start to disappear.

Finance teams gain real-time visibility on where every invoice stands. Reconciliation happens automatically rather than manually. The invoice interception risk drops away because there is no email to intercept and no payment details to steal or change.

Payment method flexibility opens up too – when infrastructure supports multiple settlement options, buyers and suppliers gain access to multiple settlement options without the overhead of managing them separately. A supplier accepting card payments at the end of a 60-day term is effectively financing another 60 days – connected infrastructure removes that imbalance by giving both sides visibility and control over how and when payment happens.

Buyers gain the flexibility to manage cashflow without forcing delay onto their supply chain. There is a compounding benefit, too. When one business moves to more connected infrastructure, it creates a better payment experience for every business it trades with. A supplier that connects to get paid faster also makes it easier for its own customers to pay.

Over time, clusters of trading partners end up on shared rails, and the friction that causes delays across the whole chain starts to reduce. Businesses already operating on this kind of infrastructure report fewer failed payments, faster settlement and significantly less time spent on administration.

Where finance leaders should start

The starting point is practical. Audit your payment process end to end: map where invoices are generated, where they go, how they get approved, how payment is triggered and how reconciliation happens. Look for the gaps: where data gets rekeyed, where humans chase what a system should track, where an invoice detaches from the process that created it. Talk to your customers and suppliers too. The spreadsheet may say one thing, but the people on the other end of your process may tell you something very different.

Pay particular attention to the points where information passes between systems or teams. Those hand-offs are where delays compound and errors creep in. Then identify your highest-volume trading partners and work out where infrastructure changes would have the most immediate impact on cash flow. Piloting with those relationships first gives you measurable results without requiring a full transformation on day one.

Late payment is not going to be solved by asking businesses to try harder. The incentives are too clear and the infrastructure too fragmented. Finance leaders who want to get cash in faster need to treat this as a process problem, not a people problem. Find where the data breaks, where visibility disappears, and where payments detach from the systems that created them. The businesses that move first will not just collect faster. They will spend less time chasing and more time on work that actually matters.

Tim Annis is CEO at Bluechain

Main image courtesy of iStockPhoto.com and olm26250