Two-thirds of tradespeople chasing late payments

New research from Direct Line Business Insurance shows late payments are worsening across the trades sector, with over two-thirds (68%) of tradespeople currently chasing at least one overdue invoice, with the average amount owed standing at £2,023.

Over half of the trades sector (53%) says they are experiencing more late payments than a year ago.. Many are juggling multiple outstanding debts: almost one in four (23%) are currently chasing four or more late payments simultaneously, with 7% chasing six or more.  

Over four in ten tradespeople (42%) surveyed have been forced to write off debts of over £500 from invoices that were never paid and a fifth (20%) have abandoned chasing invoices of over £1,000. The average largest amount written off by tradespeople is £1,646. 

Nearly half (46%) of tradies say that they now ask customers for ‘proof of funds’ before starting larger jobs with a further four in ten (44%) saying that they are considering doing so. The most common proactive measure is taking half the payment upfront (39%), followed by sending invoices well in advance (29%) and charging late payment fees (26%).  

Nearly half of tradespeople now ask for proof of funds before starting larger jobs, while upfront payments and late-payment charges are becoming more common. Whllst nine in ten (90%) either ask or are considering asking clients for ‘proof of funds’ for larger jobs before starting work.

Mark Summerville, Product Manager at Direct Line business insurance said “Late payments are often cited by tradespeople as their biggest problem. When a client fails to pay on time after work is completed, it can create a highly stressful situation. Payment delays disrupt both personal and business finances, affecting the ability to cover bills and manage cash flow for future projects. In some cases, tradespeople feel they have no choice but to write off unpaid invoices, which is not only financially damaging but also deeply demoralising.”