B2B payment practices trends in United Kingdom 2025

What’s behind the growing concern over B2B payment delays in the UK?

Payment delays a major concern amid perfect storm of financial challenges

The payment behaviour of business-to-business (B2B) customers in the United Kingdom has remained largely unchanged in recent months, with payment delays still widespread across the market. 51% of B2B invoices are currently overdue, the consumer durables sector impacted in particular. Bad debts account for 7% of all B2B invoices, continuing to strain the financial health of companies, notably in the agri-food industry. 

In response to the continuing issue of payment delays, UK businesses have scaled back the amount of credit offered to B2B customers, which now accounts for 49% of all B2B sales. Alongside this, more than half of companies in our survey have adjusted payment terms for customers. Slightly more flexible payment conditions are evident in the consumer durables sector, a move designed to retain customer loyalty, while the agri-food industry has shortened payment terms, acting prudently to mitigate the risk of bad debts. These adjustments in trade credit policies mean 60% of UK companies have reduced volatility in Days Sales Outstanding (DSO). While this has eased liquidity pressure, transport businesses report they have not been able to unlock cash from receivables as quickly as hoped. Our survey found consistent levels of Days Payables Outstanding (DPO), although this is challenging in the consumer durables sector. To bridge liquidity gaps, three in five UK businesses, primarily in the consumer durables industry, turn to bank loans. Agri-food companies rely mainly on supplier credit to plug cash flow gaps.

What are the concerns for English businesses in the coming months?

Widespread mood of uncertainty as companies face liquidity pressures

The outlook on insolvency risk varies notably across industries in our survey of UK companies. Agri-food businesses express the greatest uncertainty, while there is a more balanced mood in the transport sector and some optimism in the consumer durables industry. However, the unpredictable economic and trading landscape, along with the volatility of input costs and demand trends, could increase the financial vulnerability of companies in the months ahead. Uncertainty clearly extends to key areas of working capital management. Many businesses are unsure about the outlook for Days Sales Outstanding (DSO), and there is a general sense that inventory turnover will not improve significantly.

Industry insights 

Agri-food industry

Most UK companies in the agri-food sector report an increase in sales made on credit compared to the previous year, with 52% of sales to B2B customers now transacted on credit. Payment terms have remained mostly unchanged, but when adjustments are made, they tend to be more relaxed. Our survey found that 47% of B2B invoices are overdue, while bad debts affect an average 10% of B2B invoices, signalling ongoing collection issues. Against this backdrop, managing working capital remains a particular challenge, with slow-moving inventory and difficulty in freeing up cash from receivables. 

Consumer durables industry

With nearly 50% of their B2B sales made on credit, UK consumer durables businesses have become more cautious in offering credit in recent months. Alongside this shift, most companies have kept payment terms unchanged, opting for consistent payment policies. While the proportion of late payments has remained stable, affecting 54% of B2B invoices, companies report a decrease in bad debts. This suggests better collection efficiency, which is also reflected in a noticeable improvement in Days Sales Outstanding (DSO). The change helps offset the challenge of cash flow constraints caused by slow-moving stock, which otherwise prevents freeing up of cash. 

Transport industry

Our survey finds that nearly half of B2B trade in the transport sector is transacted on credit, and that most businesses have kept payment terms unchanged. In some cases, these terms were relaxed and used as part of a strategy to maintain strong customer relationships and support ongoing sales, particularly in the face of a challenging business environment. Overdue invoices remain a significant concern, however, with nearly half of B2B sales on credit affected by payment delays. Bad debts account for 6% of total B2B sales on credit. Companies have responded with more efficient collection strategies, which has reduced fluctuations in Days Sales Outstanding (DSO).  Slow-moving inventory remains a challenge, tying up liquidity, but despite this, businesses have kept supplier payment cycles at the same pace, reflecting a strategic effort to avoid disruptions to supply chains. 

Interested in finding out more?

For a complete overview of the 2025 survey results for United Kingdom, download the full report available in the related documents section below.

To explore more on how these insights can strengthen your own credit risk strategy, speak with us at Atradius to see how we can help you stay ahead.