Escalation in the Middle East, airspace closures and pressure on shipping routes are disrupting the movement of goods and delaying supply. At the same time, volatility in energy markets is pushing prices higher, with oil moving above $100 per barrel as access tightens and flows become less reliable.
These conditions are making costs more difficult to predict and planning more uncertain. In response, businesses are holding onto cash for longer. When visibility is low and conditions can change quickly, liquidity provides a buffer and a degree of control.
Economic uncertainty is changing payment behaviour, affecting how and why businesses pay, causing payment patterns to change. Delays become more common, timelines less consistent and predictability harder to identify.
Changing payment behaviour has become a prioritisation decision
Businesses become more deliberate in how they manage their cash outflows. Rather than paying invoices in order or when they become due, they’re picking and choosing which ones to pay first or hold back based on their situation. Liquidity is preserved where possible, and obligations are ranked based on operational importance, perceived consequence and strategic value.
Late payment is a conscious choice
For many businesses, delaying payment is now part of how they manage cash flow day to day. Holding onto cash a little longer gives them more room to respond if costs rise or revenue slows. This isn’t limited to companies in difficulty. Stable businesses are doing the same. They’re being more careful with cash and selective about when it leaves the business. Late payment then becomes normal behaviour, reflecting broader changing payment behaviour across businesses.
This is an immediate response to uncertainty. When future costs and revenues are unclear, cash is allocated where it matters most.
Traditional credit control is under pressure
Most credit processes are built on a simple idea. If you remind someone to pay, they will. If you escalate, they will pay faster. That’s not really the case anymore. Many customers already know what they owe. Reminders don’t change the fact that they’ve decided to wait. This is where friction starts to build. Credit teams are following the process but the process isn’t designed for deliberate delay.
The issue then comes down to business intent.
What this means for business
Changing payment behaviour doesn’t affect everyone equally. Businesses that adapt quickly and stay closer to what’s happening are better placed to manage the current uncertainty. Knowing when to adjust routes, how to balance cost against speed and where risks are emerging allows businesses to stay in control, even when conditions are changing.
Governments are already responding with new legislation. The UK, for example, will cap payment terms, introduce mandatory interest on late payments and allow fines for persistent late payers. But despite this, payment behaviour isn’t reverting.
This is important for business – understanding the why behind overdue payments and knowing how to respond accordingly.
To respond effectively to changing payment behaviour, businesses need to:
- Reassessing how customers are segmented
This needs to reflect how customers pay now, not what they’ve been doing historically. - Prioritising effort based on intent
Some customers can’t pay, others are choosing not to – just yet. Focusing on the right accounts will improve outcomes. - Adapting collections approaches
Fixed reminder and escalation processes are less effective when delay is deliberate. Engagement needs to reflect context and timing. - Identifying risk earlier through data
Small changes in behaviour can signal bigger issues. Earlier visibility allows you to be more proactive.
Changing payment behaviour is now a defining feature of economic uncertainty, with businesses becoming more deliberate, less predictable and more responsive to risk in the moment.
Businesses that can identify risk earlier with more intelligent, data-led approach to collections and customer management becomes the most important step in addressing payment behaviour.
For more advice, speak to our expert credit advisers at Baker Ing.