In July 2025, the UK prime minister announced companies that continually pay suppliers late will face fines worth potentially millions of pounds.
For finance leaders, this legislation is more than a compliance box-tick. It’s a financial risk, a reputational challenge, and an opportunity to modernize processes. Basware helps organizations deal with this head-on. By automating invoice validation, processing, and payment scheduling, Basware ensures compliance while also driving improvements in other areas.
The scale of the late payment problem
Late payments are systemic. Globally, 50% of supplier invoices are paid late, costing businesses an average of $45 million every year in supply chain disruptions.
In the UK, Payment Practices Reporting reveals similar concerns. For example, Kier Limited’s H1 2025 data shows that 39% of invoices were paid late, with 18% more than 60 days overdue.
What the new UK legislation means for businesses
The government’s late-payment crackdown introduces strict rules. Suppliers must be paid within 30 days, and if more than 25% of invoices are late, fines of up to double the statutory interest will apply to every overdue invoice. With statutory interest currently set at 8% plus the Bank of England base rate of 5.25%, these penalties can escalate quickly.
The risks are enormous for companies managing billions in supplier spend
For example, an organization with £2 billion in annual spend, where 30% of invoices are paid late by an average of 15 days, could face potential fines of more than £6.5 million each year. This means business continuity and reputation are on the line.
How Basware automation mitigates compliance risk
Basware helps companies stay ahead of regulations by combining automation, AI, and transparency to reduce late payment risks and streamline operations.
Key capabilities
- Invoice validation and coding: Guardian blocks invalid invoices at the source.
- Automated scheduling: Ensures payments are processed on time.
- AI-powered risk prediction: Flags and mitigates risks before they escalate.
- Audit trail: Provides full transparency for compliance and audits.
These capabilities give finance teams the control and visibility needed to keep invoices flowing smoothly and payments compliant.
Proven results
Customers using Basware automation achieve measurable improvements in both compliance and efficiency:
- 85% on-time payments compared to an industry average of 50–60%
- Processing time cut from 10.1 days to less than 1 day
- Lower costs, with automated invoices at just $2.36 each, compared to up to six times higher for manual processes.
The business case in action
Customers are already seeing tangible benefits.
- KION Group cut processing time by 50%, achieved 42% touchless invoices, and brought more than 90% of spend under management.
- Across Basware’s customer base, AP teams have reduced average supplier-payment times by 38% in the first year.
- Companies capture early-payment discounts and optimize cash flow by aligning payments with negotiated terms.
While non-compliant firms risk fines running into millions, organizations using Basware automation reduce delinquency, avoid penalties, and strengthen supplier trust.
Compliance is just the beginning
The UK government’s late payment crackdown is a chance to rethink how companies manage accounts payable. With Basware automation, organizations can stay compliant while building stronger supplier relationships and driving efficiency.
Don’t let late payments put your business at risk—discover how Basware turns compliance into a competitive advantage.
