In its latest report on the state of late payments, Sidetrade found that as of May 25, the finance, insurance and real estate sector has been hardest hit by overdue B2B invoices, with at least 76 percent of invoices more than 10 days past-due.
Meanwhile, the information, communication and technology (ICT) sector sees 60 percent of its invoices overdue, and leisure and hospitality has 55 percent of invoices over 10 days past-due. Despite the troubling findings, Sidetrade noted that across all six nations analyzed, there has been a significant improvement in invoice payment habits — though it warned that late payments remain high across the board.
Key Stats
67 percent of businesses expect revenue declines as a result of the pandemic
One in four U.K. small and medium-sized businesses (SMBs) doubt they’ll survive to 2021
40 percent of small businesses in the U.K. now have more than $12,670 stuck in B2B receivables as they wait for their invoices to be settled
IBM had been paying 55 percent of its invoices in 60 days or less; it now pays 90 percent of bills within that timeframe
A clear picture of the impact of the Covid-19 crisis per business sector
A first of its kind, the Sidetrade tracker analyses the impact of the Covid-19 crisis on twelve business sectors. As of 25 May, the UK sectors hardest hit by payment delays tied to the crisis are:
- Finance, Insurance, Real Estate: 76% of invoices over 10 days overdue
- ICT (Information, Communication, Technology): 60% of invoices over 10 days overdue
- Leisure, Hospitality: 55% of invoices over 10 days overdue
Note that Finance, Insurance, Real Estate, as well as ICT are areas where late payment rate was already high prior to the pandemic: 56% and 53% respectively.Sectors least impacted by the crisis include Food industry (19% invoices over 10 days overdue), retail (22%) and manufacturing (23%).
Hard hit by the crisis, the UK seems to be seeing the first effects of lockdown exit
Evidence from the Sidetrade tracker shows a strong correlation between payment behaviour and economic activity. The latest tracker release was highly awaited this week to see the effect of exit from lockdown. With 38% unpaid invoices as of 25 May 2020, the UK has seen a slight improvement in customer-supplier relations. This is the first positive effect of lockdown exit.
38% of invoices by value are at least ten days overdue, as the UK is beginning to feel the effects of lock-down exit.
However, by volume, the percentage is 49%! This is a increase since the pandemic of 209%
The sectors hardest hit by late payments in the UK since 25 May are Real estate, hospitality and ICT.
Prior to the covid-19 pandemic, late payments were already an issue in Finance, Insurance, Real Estate (56%), and in ICT( 53%).
Sectors least impacted by the crisis include Food industry (19% invoices over 10 days overdue), retail (22%) and manufacturing (23%).
Late payments have been fluctuating in May between 35% and 39% by value but this an improvement from the peak at the end of April of 43%
However, It is still far worse than before the pandemic lock-down when late payments in the UK were fluctuating between 25% and 29% by value. So late payments by value have increased by approximately 40% since the lock-down started.
Forward thinking SMEs across the UK will now have a cutting-edge accounts receivable solution within their grasp, thanks to a new partnership between AI firm Sidetrade, and Threadgold Consulting.
Threadgold Consulting is a specialist ERP consultancy, enabling businesses to use cutting edge SaaS products for efficiency, scalability, intelligence, and risk reduction. They also develop innovative proprietary solutions. Karl Threadgold, managing director of Threadgold Consulting, says the decision to partner with Sidetrade was easy, thanks to Sidetrade’s long history of delivering powerful accounts receivables (A/R) platforms based on AI technology.
“We are excited to take advantage of these enterprise-grade technologies for our customers, to augment the capabilities of their cloud-based ERP. We’re looking forward to bringing the power of Sidetrade’s solutions into the savvy and sophisticated SME market,” said Mr Threadgold.
Sidetrade supports CFOs with challenges such as improving working capital, accelerating cashflow generation and reducing bad debt. Sidetrade receivables solutions provide cashflow visibility in real time, improve collections, and increase customer satisfaction by resolving disputes faster.
Aimie, Sidetrade’s artificial intelligence assistant, automates A/R, generates credit management team workloads, and recommends the most effective customer dunning strategies. Aimie also takes on and automates many of the large-volume, repetitive tasks associated with accounts receivable, freeing up staff time for value-added work.
“There is huge potential to scale up significantly across specific ERP user communities. Our partnership will create a new entry point for smaller but scaling companies to get the edge over competitors. AI gives scaling companies a better handle on cash management, which means they can be less reliant on loans and other external funding. It also helps them show potential investors that they have responsible customer relations and cashflow, making them a more attractive investor opportunity,” says Sunil Pandit, partner and alliances lead at Sidetrade.