New research shows the scale of the late payment crisis

Ford Pro’s latest piece of research has highlighted that across the UK tradespeople are not being paid for work. And it’s not just a small amount either. An astonishing £3.5 billion in unpaid invoices are currently owed to tradespeople across the nation, translating to an average of £3,942 owed per tradesperson, and almost twice the average monthly salary of a tradesperson.

Late payments are a regular challenge for the industry, with nearly two-thirds of tradespeople reporting delays in receiving payments. For nearly one in five, late payments are the norm for most of their projects.

Ford Pro has recruited the help of twins, Louis and Harry, to help spread the word and raise awareness about this issue, as they sought to track down those that owed their parents money for finished work.

Take a look at how their story unfolds in the video below.

Concerns heading into Christmas

As we head into the Christmas period, tradespeople, like all of us, are preparing themselves for what is a very expensive time of year. And unresolved invoices mean less money in their pocket to support their family during the festive season.

Homeowners and tradespeople alike will be feeling the pinch, so it is important that both sides are able to come closer together and avoid awkward situations. from helping tradespeople create more effective invoices, to helping homeowners understand the potential impact of an unpaid invoice.

The reality of the situation is that almost two-thirds of tradespeople experience late payments regularly, with an average delay of 35 days. And worse still, 71% of UK tradespeople have experienced outright payment refusal, which is taking its toll this Christmas. So much so that one in five (20%) tradespeople express concern about their ability to support their families this Christmas, and the same percentage have had to cancel holidays in the past due to late or withheld payments.

The financial strain of late payments sees nearly one-quarter of tradespeople (23%) struggling to cover essential bills each month, and almost one in five (17%) resort to payday loans to make ends meet.

What’s driving delays to customer payments

So, why the delay? The most common excuse is a dispute over the charge, with 49% of late payers saying they were unhappy with the final bill. However, nearly one in five (18%) homeowners admit they spent the money elsewhere, opting to treat themselves with nights out or other purchases instead of paying their tradespeople.

These delayed payments mean that tradespeople are finding it tough to keep up with monthly bills, with 23% saying they're struggling to afford basic expenses. To make ends meet, 17% have even resorted to pay-day loans.

As the holiday season approaches, one in five tradespeople worry about being able to support their families this Christmas. Late payments have also forced 20% to cancel planned holidays in the past, adding more strain to their finances.

Some advice from customers

We have been speaking to homeowners to understand what holds them up. Below is a brief list of what they say would help speed things up and get tradespeople paid quicker.

• When quoting and invoicing, be sure to provide detailed information around the work carried out and the materials required
• Make it easy for customers to pay in a secure way
• Provide pre-agreed T&Cs that both tradesperson and customer can hold each other to
• Provide a deadline for payment so expectations on both sides are clear

As we approach the holiday season, this is a reminder to keep clear communication with clients and, perhaps, to give a friendly nudge ready for those who still owe you for that recent extension or boiler replacement, to ensure you can set yourselves up for a very merry Christmas.