A third of UK businesses extend payment terms over impact of rising energy costs, Brexit and COVID-19
59% of UK businesses say suppliers have ended relationships with them due to repeated late payments, while 67% fear late payments could trigger a global cashflow crisis
Research from eWorld sponsor Ivalua, a leading global spend management cloud provider, has revealed that more than a third of UK businesses (36%) have extended payment terms for suppliers in the last 12 months, due to the impact of COVID-19 (62%), Brexit (39%), and rising energy costs (38%).
The Ivalua-commissioned study, conducted by Coleman Parkes, reveals the true impact of late payments on the supply chain, with 59% of UK businesses reporting that suppliers have ended relationships with them due to repeated late payments.
Additional key findings include:
– 62% of UK businesses say that paying suppliers late has significantly damaged relationships
– 67% of UK businesses fear we are risking a cashflow crisis if firms continue to pay suppliers late
– Just 38% of UK businesses are using an early payment discount scheme
“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,” commented Stephen Carter, Director of Payments Strategy at Ivalua. “The pandemic has also accelerated a shift in customer-supplier relationships, whereby companies are abandoning a more traditional transactional approach and aim at becoming customers-of-choice of their more strategic suppliers to increase the resilience of their supply chains.”