HOSPITALITY AMONG UK'S WORST SECTORS FOR PAYMENT PRACTICES

Hospitality and food-related industries are among the UK's worst when it comes to paying suppliers on time, according to a new analysis by campaigning group Good Business Pays.  Technology and communications sectors, on the other hand, stand among the best when it comes to settling invoices on time. 

The data, which was collected in February 2024, demonstrates that, due to traditional methods such as paper invoicing and cheques, pay performance is poor due to the inefficiency of these processes. The research shows that, often, relationships between suppliers and buyers can impact hospitality payment practices, meaning performance is dependent on the strength of the B2B relationship. 

Companies that have a payment history over 55 days include Elior UK Plc, Taylor Shaw Ltd, Travelodge Hotel and Harvey Nichols and Co. The average time to pay across the industry is 46 days.

The analysis follows the publication of the Good Business Pays Late & Slow Watchlist Spring 2024, which named companies that are serial late and slow payers. Thanks to the campaign, the UK branch of Coca-Cola has committed to paying small suppliers within 30 days. 

'A systemic poor payment culture'

Terry Corby, CEO of Good Business Pays, said of the findings: "Thousands of small businesses are being held back by a systemic poor payment culture that has developed in the UK over decades, causing at least 50,000 business closures each year according to the FSB. Good Business Pays constantly watches payment culture in business with an ambition and mission to stamp out bad payment practices and poor payment culture.

"We know that the hospitality industry is on its knees and it's hard to read that some suppliers have to wait nearly 75 days for an invoice to be settled. This can be incredibly damaging to small businesses and restaurants that rely on steady cash flow to stay open. Looking to the future, there are great opportunities to make big changes to poor payment behaviour, such as adopting streamlined digital payment solutions to improve efficiency. By bringing attention to this data, we hope to encourage companies, big and small, to play their part in the economic ecosystem to allow opportunity for growth for all suppliers."

Backed by the Federation of Small Businesses, British Chambers of Commerce, CBI, and manufacturers group Make UK, the Good Business Pays movement was launched in May 2021 to encourage the UK's largest companies to speed up payments to small suppliers, helping them bounce back and inject vital capital into the economy. The research comes as both Intuit Quickbooks and Mastercard pledge their support to the campaign.

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