Reporting on payment practices, a practical guide for UK businesses

Reporting on payment practices is a legal requirement for many UK businesses, but it also affects how your business is viewed by suppliers, lenders and partners. Whether you’re required to report or you’re reviewing the reports of other companies, understanding how payment practices reporting works can help you stay compliant, protect your cash flow and make better decisions about who you do business with. This guide explains what reporting on payment practices is, whether it applies to you, what you may need to report, and why the information matters in practice.

What is reporting on payment practices?

Reporting on payment practices refers to the requirement for certain UK companies to publish information about how they pay their suppliers. The aim is to improve transparency around payment behaviour and tackle late payments, which are a major cause of cash flow problems for small and medium sized businesses. The requirement is set out in the Reporting on Payment Practices and Performance Regulations 2017, which were introduced under the Small Business, Enterprise and Employment Act 2015. Reports are published on a public database managed by the UK government. This means your payment behaviour, or that of a business you trade with, can be seen by suppliers, customers, lenders and credit reference agencies.

Who has to report on payment practices?

A company must report if, in its last two financial years, it meets at least two of the following criteria:

• Annual turnover of £36 million or more

• Balance sheet total of £18 million or more

• 250 or more employees

This applies to UK registered companies and limited liability partnerships. Subsidiaries may also need to report if they meet the thresholds, even if their parent company already reports. LLPs are covered by equivalent regulations that mirror the company reporting requirements. If you don’t meet these thresholds, you don’t need to submit a report. However, it can still be useful to understand how payment practices reporting works, particularly if you rely on credit from suppliers or offer credit to customers.

What information must be reported?

A payment practices report must cover several key areas and be submitted twice a year. The information includes:

Payment terms

Companies must state their standard payment terms, including:

• The typical length of payment terms (for example, 30 or 60 days)

• Whether terms differ between suppliers

• Whether suppliers are offered early payment discounts

Payment performance

This section focuses on how quickly invoices are actually paid, including:

• The average time taken to pay invoices

• The percentage of invoices paid within agreed terms

• The percentage paid late (and by how long)

Dispute resolution

Businesses must explain:

• Whether they have a process for resolving payment disputes

• How disputes can affect payment timelines

Supply chain finance

If a company uses supply chain finance (such as reverse factoring), it must disclose:

• Whether such arrangements exist

• How suppliers can access them

All reports must be approved by a director (or designated member for LLPs), making accuracy and internal governance especially important.

When and how reports are submitted

Reports are submitted every six months, based on the company’s financial year. They must be filed within 30 days of the end of each reporting period and are published on a central online service linked to Companies House records. Failure to report on time, or submitting false or misleading information, is a criminal offence under the Regulations and can result in fines.

Why payment practices reporting matters

Even for businesses that are not legally required to report, payment practices have real world consequences. If a business pays late, it can lead to:

• Damaged supplier relationships

• Increased costs through penalties or lost discounts

• Cash flow pressure across the supply chain

On the other hand, clear and consistent payment practices can:

• Improve supplier trust and retention

• Strengthen negotiating positions

• Enhance a company’s reputation with lenders and partners

Because reports are public, payment behaviour is no longer private. It can be compared across businesses and used as part of commercial decision making.

Payment practices and credit assessment

You can also see a company’s payment performance in a Capitalise business credit report. This shows how a business has historically paid, alongside other key information such as its credit score and any registered legal notices. Taken together, this information helps you assess risk more clearly. Credit checking a company helps you understand how likely you are to be paid on time and whether there are any warning signs to be aware of. It can inform decisions such as whether to offer credit, what payment terms to agree, or whether additional controls are needed. If you want to check a company’s credit profile yourself, you can sign up to Capitalise for free and easily run business credit checks.