Outstanding government invoices dating back to 2006 exemplify major challenges in financial management
UK government departments have been waiting on payment for nearly two decades, despite strict regulations designed to ensure timely payments, new Freedom of Information (FOI) data obtained by Quadient (Euronext Paris: QDT), reveals. The oldest outstanding invoice traces back to March 2006, while the government itself is still to pay invoices from as far back as June 2007 – in both cases pre-dating 2008’s introduction of the Prompt Payment Code.
Compliance with the code is mandatory for Government departments, requiring undisputed invoices to be settled within five days and all other invoices within 30 days. Yet the FOI responses make clear that this cannot always be met. Other findings include:
- The total value of these oldest invoices owed by departments is £1,657,881.39
- Departments are owed a total of £289,262.48 by suppliers
- The Ministry of Defence holds the highest invoice still to pay, valued at over £757,000 from June 2023
This data highlights that even government departments beholden to strict payment codes can struggle to pay invoices for months or even years, suggesting that organisations need to do everything in their power to ensure prompt payment.
“While there are many reasons for slow payments, such as disputes, unfinished work, or personnel changes, these delays aren’t simply administrative oversights – they have real, tangible consequences,” said Laura Elliston, Senior Finance Automation Strategist at Quadient. “Behind every unpaid invoice lies a business potentially facing cash-flow challenges, a contractor unsure if they’ll be paid, or a critical public service disrupted. The fact some invoices are outstanding for nearly 20 years exposes that delays and difficulties can rumble on for years or even decades. While there will always be exceptions, these delayed payments cannot become more than outliers. If even well-regulated government departments can struggle this badly, the scale of the challenge facing private-sector organisations is clear.”
The FOI data further highlights stark differences between accounts payable and accounts receivable among government bodies, underscoring universal challenges in invoice management:
- The invoices departments owe range from 19 days to 18 years late, although the oldest is a clear outlier. The departments with the oldest invoices are:
- Foreign, Commonwealth & Development Office – June 2007
- Department for Environment Food and Rural Affairs – February 2018
- Ofgem – February 2019
- Conversely, invoices owed to departments range from 56 days to 19 years late, and are consistently later, suggesting government departments are generally performing better in managing their payment obligations than their customers. The oldest invoices owed to departments are:
- Department for Work and Pensions – March 2006
- Ministry of Defence – August 2006
- Department for Education – October 2009
- The Office of Rail and Road faces the largest single unpaid receivable, valued at over £193,000
Interestingly, only Ofwat reported no outstanding invoices, either payable or receivable, suggesting that effective invoice management, though difficult, is achievable.
The findings illustrate the critical importance of robust invoice management systems for organisations of all sizes. With impending e-invoicing mandates anticipated in the UK, organisations must proactively transition to automated solutions that streamline processes, enhance transparency, and protect their financial health.
“The answer isn’t simply stricter oversight or tougher rules – it’s smarter, technology-driven processes,” continued Elliston. “Automating invoice management through solutions such as e-invoicing provides enhanced visibility and significantly reduces the risks associated with manual processing. Departments and businesses alike urgently need to invest in these advanced solutions to ensure that financial management is timely, accurate, and efficient. Waiting for new mandates or procurement processes to evolve is no longer an option when financial stability hangs in the balance.”