If you’re in real estate, hospitality or ICT, there’s a good chance you’ll have been hit hard by the coronavirus crisis and lockdown, as a new study has found that these are the sectors that have suffered more late payments than any others.
The coronavirus lockdown has put businesses in every sector on the back foot, and when juts one business stops trading, this can send shockwaves through the entire business world as payment and supply chains are disrupted.
A new study from Sidetrade, the Artificial Intelligence platform dedicated to accelerating company revenue and cash flow, has found that over a third (38%) of all invoices in the UK are at least 10 days overdue.
Which sectors are suffering most from late payments?
Sidetrade has been publishing an B2B unpaid invoice tracker for just over a month, to work out the week-by-week behaviour of more than 3.7 million businesses across six European countries – Belguim, France, Italy, the Netherlands, Spain and the UK.
It has also analysed the impact of the Covid-19 crisis on 12 business sectors, and has found the following to have been the hardest hit in the UK:
- 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
These sectors already suffered from disproportionately high late repayment rates before the pandemic, with 53% to 56% of invoices being overdue.
Which sectors are suffering least from late payments?
The tracker also looked at those sectors least affected by late payments during the pandemic, and they are:
- Food industry – 19% invoices over 10 days overdue
- Retail – 22% invoices over 10 days overdue
- Manufacturing -23% invoices over 10 days overdue
For the latest trends per industry, visit https://invoice-tracker.sidetrade.com.
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.
Nonetheless, the unpaid rate remains extremely high, representing a threat for many businesses. Late payment deterioration in the UK rose +26%.
For the first time, all six countries tracked showed a significant improvement, even though the unpaid rate is still high. The UK has the highest rate (39% unpaid), whereas the Netherlands can boast the lowest figure: 18% unpaid, not far from their pre-pandemic rate of 15%.
The Sidetrade tracker is a trusted reference for payment behaviour trends. In the coming weeks, it will be a crucial to analyze the reality of the economic upturn in Europe.
