If you’re profitable on paper but stressed in real life, you’re not alone.
Late payments are one of the most common causes of cashflow pressure in the UK. Research published via the Small Business Commissioner and government analysis estimates that around 14,000 businesses close each year because of late payments.
That is not a “small admin problem”.
It is a strategic risk.
When receipts lag behind costs, three things happen quickly:
- Supplier pressure rises.
- Decision making becomes reactive.
- Growth slows because cash is tied up in unpaid invoices.
The goal is not to chase harder.
The goal is to regain control of cash, commitments, and cadence.
Why this happens even in good businesses
Most businesses don’t fail because they don’t sell. They fail because cash doesn’t arrive when it is needed.
Late payment research also highlights scale:
- Over 1.5 million UK businesses are affected by late payments each year.
- Late payments are estimated to cost the UK economy almost £11bn per year.
- Businesses spend huge time chasing payment (research estimates 133 million hours across the economy each year).
So if you’re experiencing it, you’re not “doing something wrong”.
But you do need a better system.
The real issue: cash timing vs cost timing
Most cashflow problems are timing problems.
Your costs are predictable:
- Payroll leaves on time.
- VAT and tax deadlines don’t move.
- Suppliers want paying.
Your income is less predictable:
- Customers pay late.
- Invoices get disputed late.
- Approval chains slow down.
- You get stuck in “we’ll pay next week” loops.
This creates a gap.
And that gap forces rushed decisions.
The Butterfly “Control First” Playbook
Here is a simple approach that works because it creates clarity fast.
1) Get visibility in one page – Not ten spreadsheets
You need a weekly view of:
- Expected cash in (by customer, by due date).
- Expected cash out (payroll, tax, key suppliers).
- The gap (and when it hits).
This turns stress into facts.
Facts create control.
2) Segment receivables so you chase the right money first
Not all debt is equal. Split it into:
- Due now (0-7 days).
- Late (8-30 days).
- Serious risk (31+days).
Then focus on the cash that moves the needle.
Small wins are useful, but the largest invoices usually change the outcome.
3) Lock the “invoice hygiene” basics – they matter more than people think
Many invoices go unpaid for boring reasons.
Make sure:
- The PO number is correct (if required).
- The invoice matches the contract and rates.
- The customer knows who approves it.
- The due date is clear.
- The supporting documents are attached.
If your invoice is not “approval ready”, it will sit.
And you will fund the delay.
4) Reduce disputes by forcing early confirmation
One of the most damaging patterns is when a customer disputes late.
Set a simple rule:
- “If there is an issue, it must be raised within X days of invoice date.”
This reduces last minute surprises and gives you leverage to resolve faster.
(You can also take guidance from the Small Business Commissioner resources on unpaid invoices.)
5) Create a collections cadence
Chasing should not be emotional. It should be routine.
A simple cadence:
- Reminder before due date.
- Follow up on due date.
- Escalation at 7 days late.
- Senior to senior call at 14 days late.
- Formal step if required at 30 days late.
6) Renegotiate supplier pressure before it becomes a crisis
Suppliers prefer honest communication over silence.
Practical steps:
- Agree payment plans early for key suppliers.
- Protect your “must pay” suppliers (those that keep delivery running).
- Avoid spreading small payments across everyone if it damages trust.
- Confirm next payment dates clearly and stick to them.
7) Stop growth decisions that increase cash pressure
In cash pressure, leaders often make the wrong moves:
- They take low margin work “to keep busy”.
- They discount to win revenue faster.
- They add headcount before receipts stabilise.
A simple checklist: Are you in control?
If you answer “no” to any of these, cashflow is driving you – not the other way around.
- Do you have a weekly cash view you trust?
- Do you know your top 10 invoices at risk this week?
- Do you have a clear escalation path for late payers?
- Do you know which suppliers must be protected first?
- Do you make decisions based on facts, not panic?
How Butterfly helps
When late payments are squeezing cash, we help leadership teams regain control quickly.
We support you by:
- Building a clear weekly cash and commitments view.
- Structuring receivables focus so collections are effective.
- Strengthening invoice approval flow and dispute prevention.
- Creating a practical cadence for chasing and escalation.
- Supporting supplier strategy so operations stay stable.
- Modelling scenarios so leaders can make calm decisions.
Call to Action
If you’re struggling to pay suppliers while waiting for invoices to be paid, a short conversation can bring clarity fast.
Information only. Funding outcomes depend on eligibility and third-party criteria.
