In 2019, just over half of all business invoices were paid on time. Today, that figure has cratered to 37 per cent, according to SAP Taulia’s annual supplier survey, which drew on nearly 11,000 responses. It is a long way down from the 54 per cent recorded seven years ago, and nothing suggests the floor is anywhere near.
The slow deterioration in payment discipline has finally tipped something. Two-thirds of businesses surveyed say they would now accept a discount on their invoices in exchange for faster payment. Cash today, in effect, beats a promise tomorrow, especially when promises are keeping worse time than they used to.
This willingness to sacrifice margin for speed comes against a backdrop of multiple pressures converging at once. Trade tariffs have squeezed profit margins for a quarter of the businesses surveyed. Payment delays are lengthening: 18 per cent of suppliers are now waiting between one and 15 days past their invoice due date, up from 17 per cent last year. The macro environment, such as fractious trade negotiations, tariff volatility, political unpredictability, and most recently war in the Middle East, has made reliable cash conversion a form of competitive advantage in itself.
Peddy Hashemi, global head of customer success at SAP Taulia, puts it plainly: “In today’s volatile environment, cash flow is increasingly prioritised over price. Suppliers are reassessing every available lever, from early payment programmes to alternative financing, to maintain operations and protect supply chain stability.”
The discount queue
In practice, the reassessment is visible in how businesses are diversifying their liquidity sources. Virtual or credit cards are now used by 22 per cent of respondents to bridge the gap between invoice and payment. Early payment programmes and lines of credit each account for 16 per cent of those using external finance. The menu has broadened considerably from the older world of bank overdrafts and trade credit, and the supply chain finance market, valued at around 13.4 billion US dollars in 2025, is projected to reach 18.7 billion US dollars by 2029, according to Research and Markets.
There is a striking gap, though, between what suppliers want and what they are actually getting. Just three per cent of suppliers currently receive early payment from buyers, a figure that has not moved year-on-year. Against the 66 per cent who would accept a discount for the privilege, that is a yawning mismatch. A fifth of businesses do not use external sources of finance at all, which suggests either a stubborn attachment to convention or a finance function that has not updated its tools since the fax machine was cutting-edge.
Better late than never
In Europe, Brussels is trying to force the pace with its proposed Late Payment Regulation, which would cap business-to-business payment terms across the EU at 30 days. The proposal has not gone down smoothly. BusinessEurope and EuroCommerce, two of the continent’s largest business associations, estimate that capping terms at 30 days would create a financing gap of two trillion euros for European companies and add up to 100 billion euros in interest costs at current rates. What is meant as a cure risks killing plnety of patients.
There is an irony in this, however. The very conditions driving suppliers to accept discounts in exchange for fast payment are the same that are making the 30-day cap simultaneously necessary and economically hazardous. Regulation is attempting to impose what markets have failed to sustain; imposing it may blow up the working-capital arrangements many businesses rely on to function.
The deeper shift, though, is relational rather than regulatory. Hashemi’s observation, that “buyers that can consistently offer on-time or early payment will be recognised not just as customers, but as true strategic partners”, describes an inversion of traditional commercial dynamics. For decades, large buyers used extended payment terms as a source of cheap working capital, and suppliers had little choice but to absorb the cost. Now, with two-thirds of suppliers willing to pay for the privilege of getting their money, reliable buyers have become assets rather than counterweights.
That rebalancing of power is, in its way, more consequential than any regulation. Companies building the platforms and programmes that help convert receivables into cash, quickly and predictably, are positioning themselves as something useful in an environment where cash flow is the competition. For everyone else, there remains the old approach: wait, hope, and discount later.
Photo: Dreamstime.
