Sep 30, 2025
The UK Government’s proposed late payment reform is set to become a defining moment for finance leaders across the country. The introduction of mandatory late payment fees after 60 days—reducing further to 45 days in the long term—marks a decisive shift in how businesses will be expected to treat their suppliers.
On the surface, this looks like a positive step forward, particularly for SMEs who have long suffered from late payment practices by larger corporates. But behind the headlines lies a more complex reality for CFOs, finance directors, and credit leaders.
At the recent Finance Transformation Forum, finance leaders shared their concerns:
90% expressed doubt about how these mandatory late payment fees will be enforced.
60% admitted their current finance systems are not equipped to handle the changes.
If the legislation passes, businesses could have just three months to adapt. That means compliance won’t simply be a box-ticking exercise; it could create a serious operational strain on finance teams already stretched thin.
While compliance is non-negotiable, late payment reform is really about modernising finance operations. The policy highlights a deeper truth: finance technology must evolve in lockstep with regulatory change.
Organisations that thrive in this new environment will be those that:
Automate compliance instead of relying on manual workarounds.
Strengthen cash flow visibility to navigate shorter payment terms.
Empower finance teams to focus on value creation instead of reactive problem-solving.
By rethinking how compliance fits into the bigger picture of working capital management, finance leaders can turn regulatory change into a source of competitive advantage.
At Invevo, we believe this reform should not be seen as a regulatory burden but as an opportunity. By embedding agility into finance operations, companies can achieve three key outcomes:
Improved supplier relationships – paying SMEs on time strengthens trust and supply chain resilience.
Stronger working capital management – late payment fees force businesses to manage cash flow with greater precision.
Future-proof finance operations – automated, policy-ready systems enable businesses to adapt quickly to new regulation.
Forward-looking finance leaders will use this moment to re-examine their accounts receivable processes, cash flow forecasting, and AR automation technology. Those who act now can transform what looks like a compliance headache into a strategic advantage.
The real test is simple:
If mandatory late payment fees were introduced tomorrow, would your systems—and your strategy—be ready?
For many organisations, the honest answer today is no. But with the right approach to finance transformation and technology adoption, the answer can quickly become yes.
The proposed UK late payment reform represents more than a legal adjustment. It’s a turning point that will force businesses to rethink their approach to finance technology, compliance, and working capital management.
Those that act decisively—by automating compliance, improving cash flow insight, and empowering finance teams—will not only meet the new requirements but also strengthen their competitive position in the market.
At Invevo, we help businesses modernise their finance operations so they can stay agile in the face of policy change. Late payment reform is not just about meeting deadlines—it’s about building a smarter, more resilient future for finance.
