The Cost of Waiting
And that gap is getting wider.
Across the UK, average payment times now sit at around 54 days, with SMEs typically carrying ~£147,000 in unpaid invoices at any one time. But the real issue isn’t just where we are today—it’s where things are heading.
Payment cycles are slowing. Larger customers are holding onto cash for longer, approval processes are taking more time, and extended terms are becoming standard. What used to be 30 days is now often 45, 60, or beyond.
That shift comes at a real, and often underestimated, cost.
The True Cost of Waiting
When you complete an installation or deliver equipment, you’ve already funded the project:
Materials are paid for. Labour is covered. The work is done.
But until payment is received, your business is effectively acting as the lender.
1. The Direct Cost
To bridge the gap, many businesses turn to invoice finance or working capital facilities.
Typical cost: 2–5% of invoice value
On the UK average of £147,000 outstanding:
- At 3%: ~£4,400 cost per cycle
- Over a year (assuming ~6–8 cycles): £25,000–£35,000+
This isn’t exceptional; it’s structural. For many businesses, this becomes a permanent cost of operating.
2. The Indirect Cost
The bigger impact is what that locked cash prevents.
Delayed cash flow typically drives:
- Missed supplier discounts (often 2–10%)
- Inability to take on larger or multiple projects
- Slower hiring and constrained growth
Conservatively, this equates to an additional 5–10% economic impact on project value.
3. The True Economic Cost
When you combine both:
- 2–5% direct funding cost
- 5–10% indirect opportunity cost
The total impact can exceed:
7–15% of contract value
For an installer working on tight margins, that is the difference between a good project and a great one, or between growth and stagnation.
And It’s Only Increasing
As payment terms stretch, these costs compound:
- Facilities are used more frequently
- Funding costs increase
- More cash is tied up for longer
What was once manageable becomes a drag on the entire business model.
In effect, installers and distributors aren’t just delivering projects—they’re financing their customers.
A Shift Towards Certainty
The real issue isn’t just late payment; it’s misalignment.
You deliver today, but get paid months later.
As that gap widens, the traditional model becomes increasingly inefficient.
Forward-thinking businesses are starting to challenge that assumption.
Getting Paid When It Matters
At GTFS, our Net Zero-as-a-Service model is designed to remove that gap.
Instead of waiting weeks or months after delivery:
- Payments are aligned to project milestones
- Cash is received when expected
- There is no reliance on invoice discounting to unlock liquidity
For installers and distributors, that means:
- Immediate cash realisation
- No margin erosion from funding costs
- The ability to scale without working capital constraints
Final Thought
The industry has accepted delayed payments for too long. But as payment cycles stretch further, the cost of waiting is no longer just an inconvenience, it’s a material drag on profitability and growth.
Because ultimately, it’s not just about winning work.
It’s about getting paid for it; on time.