How long do small businesses wait to be paid? The latest figures, and how to shorten the wait

UK small businesses are waiting a little longer to be paid. According to Xero's latest Small Business Insights data, published on 29 October 2026, the average time small businesses waited to be paid rose to 29.5 days in the three months to September, up from 28.8 days in the June quarter.

Here is what the latest figures show, what the law says about when a payment is late, and some practical ways to shorten the wait.

What the latest figures show

Xero says its data is based on anonymised and aggregated data from 440,000 UK small businesses. For the September 2026 quarter, it reports:

• Time to be paid: 29.5 days on average, up from 28.8 days in the June quarter.
• Late payments: 8.0 days late on average, up from 7.6 days.

Xero says both measures remain broadly in line with or better than the 2025 averages, but that the longer wait is likely adding some pressure on small business cash flow.

A separate comment from Dun & Bradstreet, published ahead of the Budget, gives a mixed picture. Its senior economist John Payne said the share of payments running more than 30 days late fell to 12.4% over the 12 months to September, down from 14.7% a year earlier. He also said larger firms continue to pay their suppliers much more slowly than smaller businesses, with almost 19% of payments from larger firms running more than 30 days late, compared with under 12% for SMEs.

When is a payment late?

GOV.UK's guide to late commercial payments says that if you agree a payment date with another business, it must usually be within 30 days for public authorities or 60 days for business transactions. You can agree a longer period than 60 days for business transactions, but it must be fair to both businesses.

If you do not agree a payment date, GOV.UK says the law treats the payment as late 30 days after either the customer gets the invoice, or you deliver the goods or provide the service, if that is later. Once a payment is late, you can claim interest and debt recovery costs. Our guide to late payment interest explains how that works.

The Commercial Payments Bill would change some of these rules. When we checked the UK Parliament Bills site on 1 November 2026, it had completed its stages in the House of Lords and was waiting for its second reading in the House of Commons, with no date set. It is not yet law.

Practical ways to shorten the wait

These are practical tips rather than legal requirements:

• Agree terms before you start. Put the payment date in writing before work begins. Our guide to setting invoice payment terms covers the options.
• Invoice straight away. If no payment date was agreed, the 30 days run from when the customer gets the invoice, or from delivery if that is later, so a late invoice means a later due date.
• Make the invoice easy to pay. Show the due date, your bank details and a purchase order number if the customer uses them. See what to include on an invoice.
• Check big customers before you agree terms. Large companies publish how quickly they pay suppliers. Here is how to check a company's payment record on GOV.UK, and whether it has signed up to the Fair Payment Code.
• Send a friendly reminder before the due date, and follow up promptly the day after it passes. Our checklist on what to do first when an invoice is overdue covers the next steps.

You can also get a free estimate of the late payment interest and compensation you could claim with our late payment calculator.

This post is general information, not legal advice about your situation.

How InvoiceCollect helps

InvoiceCollect chases limited companies and LLPs in England and Wales. It chases the debtor company for 4 weeks by email and text on working days, never more than once a day, plus a posted letter to their registered office. Interest and compensation are added where the legal conditions are met, never on a genuinely disputed invoice. Your customer pays you directly and there is no commission. We are not a law firm. Start your chase.

Sources: Xero, UK small business growth masks widening divide as agriculture sales fall and high street struggles (media release, 29 October 2026); Xero, United Kingdom Small Business Insights (published 29 October 2026); Business Money, UK businesses more upbeat as late payments ease: pre budget comment (Dun & Bradstreet, 26 October 2026); GOV.UK, Late commercial payments: charging interest and debt recovery; [UK Parliament Bills, Commercial Payments Bill [HL] (checked 1 November 2026)](https://bills.parliament.uk/bills/4128).