Blogs · July 2026 · Report

The Work Is Done. The Money Isn't.

What late payment really costs a UK trades or construction firm, and the hours you lose chasing it.

The short answer: late payment costs the UK economy almost £11 billion a year, but the biggest cost inside an individual firm is not interest or legal fees, it is staff time. A firm of 10 to 49 people spends 138 hours a year chasing money it has already earned, worth about £2,337. A firm of 50 to 249 people spends 324 hours, worth about £5,484. This is the full report, and every figure in it is sourced.

About the numbers in this report. Every figure here comes from a named, published source, and the link is in Sources at the end. The bulk of them come from one place: the research the Department for Business and Trade and the Small Business Commissioner commissioned into what late payment actually costs, published July 2025. Where a number is our own arithmetic, we say so and show the working. Where we could not stand a figure up, we left it out.

Foreword from the founders

Hey guys. Quick one before you get into this.

Everyone in this industry knows about late payment. It is not news. What surprised us was the shape of it when you actually look at the government's own numbers.

We assumed the cost was the money. Sitting there, unpaid, while you cover wages. And it is, obviously. But there is a second cost that nobody prices, and once you see it you cannot unsee it.

It is the chasing.

A firm your size spends between 138 and 324 hours a year chasing money it has already earned. That is somebody's job, for weeks, every year, ringing people up about work you already did. And it is nearly always the owner, or the one person in the office who is already doing four other things.

That is the bit our team kept coming back to. Not because the money does not matter, but because the chasing is the part you might actually be able to hand off.

There is also something in here you might not have clocked. There is a new Bill going through Parliament right now that will genuinely help a lot of small firms get paid. It largely does not apply to construction disputes. We will explain why, because we think a lot of people are going to read the headlines and assume they are covered when they are not.

Most of this report is just the numbers laid out, so you can use them whether or not you ever talk to us. That is fine with us.

Chanel, and the team at Ryku

What does this report cover?

This is for anyone running a trades firm or a construction business in the UK who is owed money right now. Which, statistically, is most of you.

It answers five questions:

1. How much does late payment actually cost, across the country and inside your firm?
2. How many hours a year does your firm spend chasing it? This is the number nobody quotes.
3. Is construction really worse than everyone else? Yes, and we will show which measure says so.
4. Is the new law going to fix it? Partly. And for construction, less than you would hope.
5. What can actually be handed off, and what cannot?

How much does late payment cost?

Late payments cost the UK economy almost £11 billion a year. (Department for Business and Trade and the Small Business Commissioner, July 2025)

That is the headline, but these are the numbers that matter more when it is your firm:

• £26 billion is owed in late payments at any given moment. That averages £17,000 per affected business.
• Over 1.5 million businesses, 28% of all of them, are affected every year.
• 14,000 businesses close each year because of late payment. That is 38 a day.

One honest note on that last one. We are quoting it because it is the government's own central estimate and they stand behind it. But the report itself puts a wide range around it, from roughly 2,000 to 27,000. So treat "38 a day" as the official best estimate, not a precise count. We would rather tell you that than have you quote it to someone who knows.

What is the cost nobody puts a number on?

Here is the part we think is genuinely under-discussed.

The single largest cost of late payment, at the level of an individual business, is staff time spent chasing it. Not debt collection. Not legal fees. Not finance costs. Just people, ringing people.

Across the UK that is 133 million hours a year. The average affected business spends 86 hours.

But the average hides you. Break it down by the size of firm and it gets much sharper:

(Department for Business and Trade, July 2025)

Read those two rows again, because they are your two firms.

A domestic trades firm of 10 to 49 people is losing 138 hours a year. That is roughly three and a half working weeks, gone, on the phone, about work you have already done and already paid your people for.

An M&E or building services contractor of 50 to 249 people is losing 324 hours a year. That is eight working weeks. Two months. Every year.

And it is almost never a dedicated credit controller doing it. In a firm that size it is the owner, or the office manager who is also doing quotes, or the contracts manager between site visits.

One more figure, and it explains a lot: only 4.1% of businesses chase an invoice before it is due. Almost everybody waits until the money is already late, and then starts. Only 46% of small businesses use invoicing software at all.

Is construction actually worse?

Yes. Two separate official sources say so, and they are worth separating carefully because they measure different things.

On how much it hurts: 10.1% of construction firms say late payment is a "big problem" for them. That is the highest of any sector in the UK. (Department for Business and Trade, from the Longitudinal Small Business Survey)

On failure: in the 12 months to May 2026, construction had 3,803 company insolvencies, 17% of all cases where the industry was recorded. That is the highest of any sector. (The Insolvency Service, June 2026)

Now the honest caveat, because we nearly got this wrong ourselves. The Insolvency Service publishes a second set of figures that counts businesses rather than registered companies, and on that measure, for calendar year 2025, wholesale and retail overtook construction. The Insolvency Service says plainly that the two sets are not comparable, because one business can contain several companies. So if you see someone claim construction is no longer the worst hit, that is the measure they are using. On the company measure, to May 2026, construction is still top.

And what we will not claim: we cannot tell you what share of those 3,803 failures was caused by late payment. Nobody can. The Insolvency Service publishes counts, not causes, and the government's own analysis says its sample is too small to break closures down by sector. You can hold the two facts next to each other. You cannot join them with a line. We are not going to pretend otherwise.

Will the new law fix it?

Partly, and for construction, less than you would hope. There is a Commercial Payments Bill in Parliament, introduced in May 2026. It is a real piece of work and it will help a lot of firms.

What is in it:

• A 60-day maximum on payment terms, with limited exemptions.
• Statutory interest at 8% over base, mandatory.
• The Small Business Commissioner gets investigation powers and binding interim adjudication.
• Six-monthly payment reporting is kept, not watered down to annual.
• For construction specifically, it proposes banning the withholding of retentions under construction contracts, subject to more consultation on timing.

That retentions line is potentially a big deal, and worth watching.

But here is the part that is not in the headlines.

Construction disputes are out of scope of the Small Business Commissioner. The industry already has its own statutory adjudication scheme, so the new binding-adjudication power, the one that will get written up everywhere as the answer to late payment, does not cover construction disputes. (Build UK, October 2025)

So when the coverage lands and someone tells you the Commissioner will sort it out, that is not true for your sector. The adjudication route you already had is still the adjudication route you have.

One genuinely good bit of news, so this is not all grim. Build UK's tier one contractor members have taken their average payment time from 45 days down to 29, and now pay 96% of invoices within 60 days. Nobody in that group averages more than 45 days. The top of the supply chain has moved. (Build UK, October 2025)

Where does this land for each firm?

Trades. You are chasing homeowners and landlords, mostly small amounts, and often the awkwardness is the problem more than the money. You did the boiler in March, the invoice went out, and now you have to ring someone you liked and ask for £340. So you put it off. Then you put it off again. Those 138 hours are not really 138 hours of work, they are 138 hours of a job nobody wants, done badly and late, by the person who least wants to do it.

Construction. Your problem is different. You are chasing other businesses, up a supply chain, with retentions and applications and payment notices and terms you did not really get to negotiate. 324 hours a year, and the awkwardness is not personal, it is commercial. And a chunk of what you are owed is not even late yet, it is just held.

The one thing you have in common: in both cases it is a person, doing admin, about money you have already earned. And in both cases nobody has ever costed that person's time until now.

What does Ryku actually do?

One agent, four ways in, all reading from the same knowledge base.

On the chasing specifically, the honest version of what it does: it sends the polite reminder before the invoice is due, which almost nobody does, since only 4.1% of firms chase early. It sends the follow-up on the day. It sends the one after that. It logs every one, so when you do need the paper trail, it is already there. It takes the awkward, repetitive, easy-to-put-off part off the person who has been putting it off.

On price, plainly: £299 a month, and the first month is free.

The comparison, since that is the point of the report:

And the caveat that keeps this honest: for a small firm, those two numbers are close enough that chasing alone does not justify it, and we are not going to pretend it does. If all you want is invoice reminders, invoicing software is cheaper. Ryku is for the wider load: the phone, the email, the chat, the messages, and the follow-up work around all of them. Look at this number next to everything else it covers, or do not look at it at all.

What will it not do?

Worth being blunt, because this topic attracts nonsense.

• It cannot make anyone pay. No software can. It removes the excuse and the delay and the awkwardness. It does not create money.
• It does not do adjudication, and it is not a solicitor. If a main contractor is deliberately withholding, that is a legal and commercial fight, and you need people, not an agent.
• It does not threaten anyone. It is your firm's voice. Chasing badly loses customers, and a rude reminder costs more than the invoice.
• It does not guess. If the terms are not in the knowledge base, it does not invent them. It hands to a person.
• It is not going to fix a bad contract. If you signed 90-day terms, the agent will remind them politely on day 91.

Where is an agent the wrong answer?

• If your problem is one big client withholding one big sum, this is not your fix. Get advice.
• If you already have a credit controller who is good at it, leave them alone. They are worth it.
• If your terms are the problem, fix the terms first. Automating a reminder about a payment term you should never have accepted just makes you punctual about being underpaid.

How do you get started?

Tell us how you actually run. We set the agent up around that, load your knowledge base with your real jobs, prices, terms and policies, and the first month is free while you decide whether it earns its place.

If it does not, you walk.

trades.ryku.ai · construction.ryku.ai

Frequently asked questions

Sources

All links checked on 16 July 2026.

• Late payments cost the UK economy almost £11 billion a year; £26 billion owed at any time, averaging £17,000 per affected business; over 1.5 million businesses (28%) affected a year; 14,000 businesses (38 a day) close each year; 133 million hours and 86 hours per affected business spent chasing; small firms (10 to 49) 138 hours and £2,337 a year, medium firms (50 to 249) 324 hours and £5,484 a year; staff time is the largest business-level cost; only 4.1% chase before the due date; only 46% of small businesses use invoicing software; 10.1% of construction firms call late payment a "big problem", the highest of any sector. Department for Business and Trade and the Office of the Small Business Commissioner, research by London Economics, July 2025. https://assets.publishing.service.gov.uk/media/688a089a6478525675738ff9/late_payments_research_impact_on_uk_economy.pdf
• Construction: 3,803 company insolvencies, 17% of cases where industry was recorded, in the 12 months to May 2026, the highest of any sector. The Insolvency Service, published 19 June 2026. https://www.gov.uk/government/statistics/company-insolvencies-may-2026/commentary-company-insolvency-statistics-may-2026
• The separate business-level measure, on which wholesale and retail overtook construction in 2025, and the Insolvency Service's own statement that the two are not comparable. The Insolvency Service, Business Insolvency Demography 2015 to 2025, published 19 June 2026. https://www.gov.uk/government/statistics/business-insolvency-demography-2015-to-2025/commentary-business-insolvency-demography-2015-to-2025
• Commercial Payments Bill: 60-day maximum terms, mandatory statutory interest at 8% over base, Small Business Commissioner investigation and binding interim adjudication powers, six-monthly reporting retained, proposed prohibition on withholding retentions in construction contracts. Department for Business and Trade, May 2026. https://www.gov.uk/government/publications/commercial-payments-bill-factsheets/commercial-payments-bill-overview
• The 45-day maximum term was proposed and not taken forward. Department for Business and Trade, government response to the late payment consultation, March 2026. https://www.gov.uk/government/consultations/late-payments-tackling-poor-payment-practices/outcome/late-payment-consultation-time-to-pay-up-government-response-web-version
• Construction disputes are out of scope of the Small Business Commissioner because the industry has a statutory adjudication scheme; tier one contractor average payment time down from 45 days to 29 days; 96% of invoices paid within 60 days. Build UK, response to the late payments consultation, October 2025. https://builduk.org/wp-content/uploads/2025/10/Build-UK-Response-to-Late-Payments-Consultation.pdf

Ryku pricing: £299 a month, first month free, as published on our pricing pages.

Our own arithmetic: the £3,588 a year figure is £299 × 12. The "three and a half working weeks" and "eight working weeks" comparisons are 138 and 324 hours against a nominal 40-hour week.

Deliberately not claimed: we do not state what share of construction insolvencies was caused by late payment. No published source supports that, and the government's own analysis says its sample is too small to break closures down by sector.