Wales

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The payment practices in Wales reveal a mixed picture. With an average payment time of 40.5 days, Welsh companies, on average, exceed the standard 30-day payment term expected in many commercial agreements. A little over half (50.13%) of invoices are settled within this 30-day window, indicating a significant portion of businesses take longer to pay. This is compounded by a late payment rate of 25.7%, suggesting a considerable number of invoices are paid beyond agreed terms, potentially impacting supplier cash flow and creating financial strain, especially for smaller enterprises.

Compared to other regions within the UK, these figures place Wales somewhere in the middle ground. While some regions demonstrate better payment compliance, others exhibit worse. The Welsh economy, whilst demonstrating pockets of growth, traditionally relies on sectors such as manufacturing, agriculture and tourism, often characterised by tight margins and seasonal fluctuations. These factors can impact payment cycles. Smaller businesses often face challenges in maintaining consistent cash flow, leading to payment delays, though late payment is by no means confined to smaller entities.

Suppliers operating in Wales should be acutely aware of these prevailing conditions. Proactive credit management is crucial. This includes thorough due diligence on prospective clients, clearly defined payment terms outlined in contracts, and robust chasing procedures for overdue invoices. Factoring or invoice discounting can offer viable solutions for managing cash flow in the face of extended payment cycles, albeit at a cost that must be carefully considered. Suppliers should also be aware of the Prompt Payment Code and encourage adherence from their Welsh clients.

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