Cash Flow Survival Guide: How Sussex SMEs Can Get Paid Faster

You’ve done the work. You’ve delivered the project on time, sent a clear invoice and moved on to the next job. But the payment? That’s another story entirely.

If you’ve ever spent your evenings refreshing your banking app or drafting yet another “just following up” email to a client, you’re not alone. Late payment is one of the most persistent and damaging challenges facing small businesses in the UK today – and for SMEs operating across Sussex, where every pound of working capital matters, it can be the difference between growing your business and just about keeping the lights on.

The good news is that there’s plenty you can do about it. This guide covers the current state of play, the legal rights you might not know you have and the practical steps you can take right now to get paid faster and protect your cash flow.

The Scale of the Problem

Let’s not sugarcoat this – late payment in the UK is getting worse, not better. According to a major 2025 survey by Coface, a staggering 90% of UK businesses are currently experiencing payment delays, with 44% reporting that these delays have become more frequent. The UK performs significantly worse than many of its European neighbours on this front, making it a particularly acute issue for British firms.

The numbers at the sharp end are sobering. Research from Intuit QuickBooks found that UK small businesses with unpaid invoices are owed more than £21,000 each on average. A Federation of Small Businesses report with GoCardless revealed that 45% of SMEs are dealing with more late payments than they were just 12 months ago, while a quarter are regularly waiting up to 60 days beyond the agreed terms. And perhaps the most telling statistic of all: 52% of small businesses simply forfeit late payments – up to ten times a year – because the time and cost involved in chasing the money just isn’t worth it.

The knock-on effects ripple through everything. Businesses that are owed money are significantly more likely to rely on credit cards, defer hiring decisions and scale back investment. At its worst, the Office of the Small Business Commissioner estimates that 38 businesses close every single day because of overdue invoices, and that UK small businesses collectively spend an average of 86 hours per year simply chasing money they’ve already earned. That’s more than two full working weeks spent on admin that shouldn’t need to exist.

This isn’t a problem unique to any one sector or part of the country. Whether you’re a digital consultancy working out of central Brighton or a trades firm based near Shoreham, the chances are that late payment has affected your business at some point – or is affecting it right now.

Your Legal Rights (That You Might Not Know About)

Here’s something that surprises a lot of small business owners: you don’t just have to sit there and absorb the cost of late payment. UK law actually gives you some fairly powerful tools.

Under the Late Payment of Commercial Debts (Interest) Act 1998, any business that supplies goods or services to another business has the statutory right to charge interest on overdue invoices. The rate is set at 8% above the Bank of England base rate – which at the time of writing works out at around 12% per annum. That’s not an insignificant sum.

On top of the interest, you’re also entitled to claim a fixed compensation fee on every late invoice. For debts under £1,000, you can claim £40. For debts between £1,000 and £9,999, it’s £70. And for anything over £10,000, you can claim £100 per invoice. You can also recover any reasonable costs you’ve incurred in chasing the debt.

The crucial point here is that these rights apply even if your contract doesn’t mention late payment terms at all. They’re automatic. That said, simply including clear late payment terms on your invoices – referencing the statutory interest rate and compensation fees – can be an enormously effective deterrent. Many clients who see those terms spelled out clearly will prioritise your invoice to avoid the additional charges.

It’s also worth knowing that the government is actively considering strengthening these protections. A consultation launched in mid-2025 proposed measures including automatic statutory interest on all late invoices, greater board-level accountability for payment performance in large companies and a requirement for clients to raise disputes within 30 days of receiving an invoice. This is very much a live conversation in Westminster, and the direction of travel is clearly towards better protection for small businesses.

7 Practical Steps to Get Paid Faster

Legal rights are all well and good, but prevention is always better than cure. Here are seven practical, actionable steps you can implement in your business right now to improve how quickly you get paid.

1. Invoice immediately – don’t wait for month-end

This is the simplest change you can make and potentially the most impactful. The clock on your payment terms starts when the invoice is received, not when the work is completed. If you finish a project on the 5th but don’t invoice until the 30th, you’ve already gifted your client an extra 25 days of your money. Send the invoice the same day the work is delivered – or even before, if your terms allow for it.

2. Tighten your payment terms

If your standard terms are 30 days, ask yourself whether that’s truly necessary. Many small businesses have successfully moved to 14-day terms without pushback. Be explicit about the due date on every invoice – “Payment due: 14 days from invoice date” is clearer than “Net 30” and leaves less room for ambiguity or convenient forgetfulness.

3. Make it as easy as possible to pay you

This might sound obvious, but if paying you requires your client to set up a bank transfer and manually key in your sort code, you’re adding friction. Offer multiple payment methods – bank transfer, card payment via a link, or even better, Direct Debit or standing order for recurring clients. The GoCardless/FSB research found that pull-based payment methods like Direct Debit can get businesses paid up to 47% faster because the money comes to you automatically, rather than relying on the client to actively initiate payment.

4. Automate your reminders

Stop spending your evenings writing awkward “just checking in” emails. Cloud accounting tools like Xero, FreshBooks and FreeAgent all offer automated payment reminders that can be sent before the due date (“Your invoice is due in 3 days”), on the due date and at set intervals after. This takes the emotion and the admin burden out of chasing – and it works. A well-timed automated reminder is often all it takes to bump your invoice to the top of someone’s to-do list.

5. Vet new clients before you start work

Before taking on a significant piece of work for a new client, do your due diligence. The government’s Fair Payment Code register lets you check whether a company is a verified prompt payer. For larger businesses, you can also look up their publicly reported payment performance data on GOV.UK, which shows what proportion of their invoices are paid within 30 and 60 days. Five minutes of research before signing a contract could save you months of frustration later.

6. Ask for deposits or milestone payments

This is particularly important for project-based work. There is absolutely nothing unreasonable about asking for a deposit upfront – 25% to 50% is common practice – or structuring payments around project milestones rather than a single invoice at the end. This keeps cash flowing throughout the project, reduces your exposure if a client goes quiet and signals that you’re a professional operation with clear terms.

7. Have the conversation early

Payment terms shouldn’t be an afterthought tucked into the small print. Discuss them openly before you start work. Agree the payment schedule, the method and the terms in writing. If a prospective client pushes back on reasonable terms or tries to impose 90-day payment cycles, that tells you something important about what working with them will be like. It’s far better to have that conversation before you’ve invested your time and resources than after.

When Cash Flow Gets Critical: Your Safety Net Options

Even with the best processes in place, there will be times when cash flow gets squeezed. Knowing your options before you need them is half the battle.

Invoice finance is one of the most practical tools available to SMEs dealing with slow-paying clients. In simple terms, an invoice finance provider advances you a percentage of your outstanding invoice value – typically around 90% – almost immediately, rather than you waiting 30, 60 or 90 days for the client to pay. When the client does eventually pay, you receive the remaining balance minus a small fee. Providers like Bibby Financial Services, Novuna and newer platforms like Triver (which uses AI to fund invoices in as little as five minutes) have made this type of finance more accessible and more affordable than ever for smaller businesses.

Within invoice finance there are two main flavours worth knowing about. Factoring means the provider takes over chasing the payment from your client – useful if credit control isn’t your strong suit, but your client will know you’re using a third party. Invoice discounting lets you retain control of the client relationship and the payment collection process, with the financing arrangement remaining confidential.

Beyond invoice finance, it’s worth having a business overdraft or credit facility arranged while things are going well. Banks are far more willing to extend credit when your books look healthy than when you’re already in a cash flow crisis. Think of it as insurance you hope you won’t need.

Finally, don’t overlook the Small Business Commissioner – a free, government-backed service specifically designed to help small businesses resolve payment disputes with larger companies. They can investigate complaints, mediate disputes and often help get payments released without the need for legal action. You can find out more and submit a complaint at smallbusinesscommissioner.gov.uk.

Building a Positive Payment Culture

The businesses that thrive in spite of the UK’s late payment problem tend to be the ones that treat cash flow management as a discipline rather than an afterthought. It’s not glamorous work, but having tight invoicing processes, clear terms, automated reminders and a willingness to have honest conversations about money is what separates businesses that grow from businesses that merely survive.

It’s encouraging to see the government taking this more seriously than ever. The Fair Payment Code, which replaced the old Prompt Payment Code in late 2024, now awards businesses at Gold, Silver and Bronze levels based on how quickly they pay their suppliers. Over 400 businesses have been awarded so far, and it’s free to apply. It’s worth checking whether your key clients are signatories – and if you pay your own suppliers promptly, consider signing up yourself. It’s a simple way to signal that you take payment culture seriously.

When you’re running an SME – whether that’s from office space in central Brighton, a suite at Shoreham City Airport or your kitchen table – every pound of working capital counts. The time you spend chasing invoices is time you’re not spending on winning new business, developing your team or improving your products and services.

You’ve earned the money. You deserve to be paid. And with the right systems, knowledge and habits in place, you can make sure that happens far more consistently.

If you’re interested in more practical business advice for Sussex SMEs, explore more on the JetSpace blog or take a look at our guides to small business cost saving, business development for SMEs and practical AI tools for small businesses.