Payment Reform Archives - Unison Direct

UK small businesses are currently owed an estimated 26 billion pounds in unpaid invoices, according to government-commissioned research from the Small Business Commissioner, and that figure isn’t a rolling annual total. It’s what’s outstanding right now, on any given day, across the economy.

That number sits behind a policy shift most finance leaders will already have clocked. On 24 March 2026, the government confirmed a package of late payment reforms. Large businesses will face a legal 60-day cap on payment terms to smaller suppliers, and statutory interest at 8% above the Bank of England base rate becomes mandatory, unable to be waived or reduced by contract. The measures are now working their way through Parliament as the Commercial Payments Bill, introduced in May, with the lead-in period still to be confirmed. Confirmed policy and law in force aren’t the same thing yet, which is worth remembering before anyone celebrates too early.

Sage’s SME Pulse data, drawn from roughly 150,000 UK businesses, puts 49% of SME invoices as overdue right now, with an average wait of 27 days past agreed terms before payment lands. That’s the problem the reform is meant to solve, and it only gets at half of it. A ceiling on bad behaviour isn’t the same as a floor under your cash position, and the day-to-day reality of when money actually arrives doesn’t shift just because the rules around it have.

A cap on terms is not a forecast

A 60-day limit tells a large customer what they can no longer legally do, but it doesn’t tell your finance team what to expect in week six. Statutory interest is a stick you get to use after the fact, once a payment is already late enough to justify reaching for it. Neither one closes the gap between the invoice going out and the cash coming in, and that gap is where most cash flow problems actually live.

Businesses waiting an average of 27 days beyond agreed terms aren’t waiting because the law was too lenient. They’re waiting because nobody chased the account, followed up, or flagged it before it drifted into overdue in the first place. Reform changes the penalty for being late. The discipline that stops an invoice reaching day 27 is a separate problem, and one the law was never going to solve.

This isn't only a small business story

Mid-market and enterprise finance teams carry the same exposure, just at a larger scale. More customers, more invoices, more variance in who actually pays on time. A bigger finance function can, in theory, staff a proper credit control process, but plenty don’t, because those roles are competing for the same finance talent that’s scarce everywhere right now. The reform doesn’t care how big your company is. There’s no reason your receivables process should either.

What actually closes the gap

Structured accounts receivable management does the work the reform can’t. That starts with invoicing cleanly enough that a customer has no real grounds to query it, and continues with credit control that catches an account drifting toward late before it gets there, rather than noticing once it already has. Collections then becomes a process rather than whichever finance person happens to spot the balance and picks up the phone, and cash flow forecasting gets built on the receivables position you actually have, not the payment terms you’re hoping customers will honour.

Put together, that’s the difference between reacting to late payment and planning around it. A business with proper AR management knows its cash position six weeks out regardless of whether a customer pays on day 30 or day 55. A business relying on the new rules alone only finds out its cash position on the day the money shows up, or doesn’t.

None of this argues against the reform. A 60-day cap and non-waivable interest are a real improvement on the current situation, and businesses should use both once they’re in force. But policy change and receivables discipline are solving two different problems. The reform sets the rules of the game. Your AR process determines whether you can actually plan your cash position with confidence, this quarter and the next.

Talk to an expert about what accounts receivable management would look like inside your finance function.