£66,770 is not a small number. Late payments for most SMEs in the UK represent weeks of revenue, months of operating costs, and in some cases the difference between a confident business and an anxious one. For many business owners, unpaid invoices have become so normalised that the total outstanding figure is rarely calculated, let alone properly managed. Take a moment and think about your outstanding invoices right now. How many are overdue? By how much? And what’s the total outstanding? The average amount of unpaid invoices owed to UK SMEs has risen by 10% year-on-year.

If you’re like most small business owners, you may not know the precise figure off the top of your head. And that is part of the problem.

Why unpaid invoices for small businesses have become the new normal

Late payment has been a persistent feature of UK business life for decades, but the scale of the problem has grown considerably in recent years. 62% of SMEs say their customers are taking longer to pay compared with a year ago. Meanwhile, almost one in five businesses (19%) admit they have delayed paying their own suppliers in order to protect their cashflow.

For many small business owners, late payments have become part of doing business and therefore, an accepted frustration. Owners manage by sending the occasional stern email accompanied by a quiet hope that the money will eventually arrive. The total outstanding figure is rarely tallied up properly and often not seen as a serious financial risk.

What to do about invoice debt for small business

1. Calculate your position
   It sounds simple but when you know how much is outstanding, it gives you greater impetus to do something about it. Add up every invoice that is currently unpaid, including every single invoice within payment terms but not yet settled.
2. Now ask yourself three questions:

• What is the total? You may be surprised by how much is owed and overdue.
• How long has this money been owed? Outstanding invoices are not all equal. An invoice that is five days overdue is a very different situation to one that is ninety days overdue. The longer the debt sits on your balance sheet, the less likely it is to be recovered in full.
• What would you do differently if this money were in your business account today? That question is worth thinking about as it reveals the true cost of that late payment.

What would you do differently if this money were in your business account today? That question is worth thinking about as it reveals the true cost of that late payment.

30% of SMEs have written off an average of nearly £30,000 due to customer insolvency or payment default. That’s a lot of money. Then there’s the additional, hidden costs, such as:

Cashflow gaps. You’ve earned that outstanding money so when it’s not in your account, you can’t use it. That means you have to cover your fixed costs, such as payroll, suppliers, or overheads, from reserves or borrowing rather than from trading income.

Deferred investment. How many business owners have held off hiring a new member of staff, upgrading equipment, or investing in marketing because of cashflow? Especially when revenue had been earned, just not collected? Late payment quietly suppresses growth.

The time cost of chasing. Every follow-up email, every uncomfortable phone call, every reminder represents time taken away from running your business. That’s both a mental and an administrative burden to chase unpaid invoices.

Being risk-averse with decision-making. Chronic late payment can change the way business owners think. It creates a tendency to hold back, to be cautious about taking on new clients, to delay commitments.

Outstanding invoices: How to manage the situation

The easiest way to manage regular late payments is to create a robust and professional credit control process. This starts with raising correct invoices promptly, with clear payment terms stated on every document. It means sending out payment reminders – you can automate this – and holding a regular aged debtor review so that overdue invoices are identified quickly and chased systematically. You need to know exactly who owes you money, how much, and for how long.

It’s not complicated work, but it does demand consistency, which can be hard when bookkeeping and credit control sit at the bottom of a busy owner’s to-do list.

Take back control of your invoice debt

If you’re concerned about the number or total amount of your outstanding invoices, or if you need help with running a robust credit control process, then the Hour Hands bookkeepers can help.

Our professional bookkeeping support not only helps you keep on top of cash flow; it will give you a real-time view of your debtor position, ensure invoices are raised and tracked properly from day one, and provide the credit control discipline that most small businesses need but struggle to maintain.

If you would like to understand your current debtor position more clearly or explore how professional bookkeeping and credit control support could improve your cashflow, please get in touch today. We’d be happy to offer an extra pair of hands.

Statistics sourced from Bibby Financial Services SME Confidence Tracker, as reported by Credit Connect, April 2026.