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50% of supplier invoices are paid late, study reveals

Friday, August 01, 2025 — 16:25:59 (UTC)

Espoo Usima, Finland—August 1st - Half of all invoices to suppliers are paid late by businesses, costing businesses $45m in supply chain disruptions each year and ‘fueling a financial health crisis’, according to invoice automation company Basware's latest Accounts Payable Benchmark Report.

In its study, Basware analyzed ‘on-time payment rates’: the percentage of supplier invoices that are paid on or before the invoice due date.

A poor on-time payment rate normally indicates delays caused by lengthy processes – the time taken to match purchase order numbers, approve and pay invoices.

Late payments are usually caused by two main reasons:

1. Slow paperwork: Inefficient processes that miss invoices or take a long time to get approval.

2. Cash flow issues: Businesses stretching their working capital to keep more cash on hand and actively deciding to pay suppliers late.

Each late payment exacerbates financial instability, highlighting the need for proactive measures. The practice of actively choosing to delay payments is not only a financial decision - it carries moral implications and undermines trust between buyers and suppliers.

Businesses that fail to pay on time are putting their suppliers, especially the smaller ones, at risk, contributing to financial instability across the supply chain.

Martti Nurminen, Chief Financial Officer at Basware, commented on the challenges faced surrounding late payments: “Late payments is driving a 45 million-dollar problem for businesses, that is fueling a financial health crisis. CFOs are on the front lines, battling to keep economic headwinds under control. Late payments add to the pressures that CFOs face managing cash flow, balancing supplier relationships, and navigating the overwhelming high-volume of invoice processing. Failing to pay or be paid on-time can sometimes be out of a CFO’s hands, but it can still cause balance sheets to spiral into a major crisis that can take down even the biggest of businesses.”

Beyond the immediate financial strain, Nurminen also stresses that late payments have ethical consequences that ripple through the supply chain.

“It’s not just a numbers game,” Nurminen explains. “When buyers delay payments, they are directly impacting the livelihoods of their suppliers, many of whom are smaller businesses that depend on timely cash flow to survive. CFOs need to recognize that ensuring on-time payments is both a financial necessity and moral responsibility.”

Organizations are able to use technology to switch from time-consuming manual invoice handling to fully automated accounts payable processes. These systems approve invoices by automatically scanning invoice information, such as those offered by Basware.

Using automated invoice processing can make payment times faster and increase on-time payment rates, as seen in Basware's report. Automation has seen on-time payment rates rise to 85% and invoice processing times drop from an average of 10.1 days to less than one day.

Timely payment of invoices not only avoids disruptions in the supply chain and additional penalties, but also strengthens relationships with suppliers. This can lead to better terms from suppliers, discounts and contributes to overall financial forecasting.

Automated invoicing cost accounts departments $2.36 per invoice, while those running on entirely manual processes are six times the cost, according to Basware’s report.

For a large manufacturing business, which typically processes up to 750,000 invoices each year, as an example, switching to automation could result in millions of dollars in savings. Warehouse equipment and forklift truck manufacturer Kion is one such case.

As part of its push to combat late payments, Kion has used automation technology to cut its invoice processing time by 50% to under one week on average. That also means that two out of every five of its invoices (42%) are paid ‘touchless’ - without any human intervention whatsoever.

With that, Kion has more than 90% of its spend under management (i.e. with preferred suppliers), resulting in improved financial oversight and expense management.

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Source: Company press release.

Categories: Reports and research