You might have heard there’s a cost-of-living crisis? Indeed, even if your own belts have remained largely untightened in recent months, if you’ve even just switched on a TV lately you’ve probably been subject to the kind of scaremongering usually reserved for biblical plagues about how much people are struggling to get by.
The truth is, as ever, a little more nuanced than just “we all have less money and everything is more expensive” but I have to admit I’ve starting to count my pennies more this year. I’ve also, unfortunately, noticed a groundswell of late payments, with clients now seemingly far less eager to clear invoices in 30 days than they were even a few months ago.
It would appear I’m not alone, as the creative sector is officially sounding the alarm over cash flow.
Recent data shows a surge in company failures: 2,048 UK businesses (England & Wales) entered formal insolvency in August 2025 (6% more than a year earlier) and creative firms (especially boutique ad, PR and design agencies) are way over-represented in these liquidations.
Even though the creative industries contribute £124 billion to the UK economy each year, we’re still being shafted. Talent and demand certainly remain, but delayed payments are crippling cash flow on a major scale.
Key figures:
- 2,100 UK company insolvencies in Aug 2025, making it the worst August in over a decade. (England & Wales had 2,048.)
- Creative firms account for a disproportionate share of these failures, with agencies facing “horrible” payment terms.
- £124bn+: the annual GVA of UK creative industries, yet persistent late pay is undermining growth.
- Nearly 30% of creative workers are freelancers, leaving many individuals directly exposed to payment delays.
The Widespread Burden of Late Payments
Across the UK and US, late invoices are endemic in the creative supply chain. Surveys of freelancers and SMEs repeatedly show extensive payment delays:
- A Creative UK freelancer survey found almost two-thirds (64%) of respondents had experienced low or unfair pay, and “an overwhelming majority” said late invoices had impacted their ability to meet rent and bills.
- In the US creator economy, one survey of 750 content creators (500 in the US) reported that 87% had been paid late, short-changed or not at all on at least one gig.
- Industry data in digital media confirm the trend: an OAREX study (H2 2024) shows 48% of all payments in digital advertising were late, with 25% of invoices more than 6 days overdue and 15% over two weeks late.
Creative projects often require teams to work months ahead of payment and agencies can wait up to a year to be paid for a campaign
Even award-winning creative campaigns are often settled late. Monet Money CEO Jacob Casson reports one case where an agency waited nearly a year before seeing any cash on a major project. Smaller independents “don’t have JP Morgan on speed dial” to absorb such delays.
As a result, many agencies must bank-roll projects: one analysis finds about £1.1 billion of UK creative-sector revenue is tied up in overdue invoices each year. Freelancers carry the brunt of these delays: the average overdue invoice for a UK freelancer is £5,230 (well over two months’ take-home pay), and 64% of freelancers say late payments have hurt their ability to afford essentials.
In the US, the picture is similarly grim. Influencers, video producers and other creators routinely chase clients for months. Nearly half of US digital media suppliers saw payments late in late 2024, mirroring the UK trend. Delays have real consequences: one survey reports 40% of creators cited chasing delayed payments as a top challenge, and over a third had to increase their rates or cut off clients due to payment issues.
Why Payment Delays Persist
The root cause is structural. Large clients and agencies often use suppliers’ cash as low-cost financing. Casson explains that corporates will hold onto money (investing it or waiting for ROI) even as their freelancers and agencies wait 120–150 days or more for payment. In other words, every creative project essentially becomes an interest-free loan to the client – one that only the biggest multinationals can afford to offer.
Other factors compound the issue. Creative work is typically costlier and more complex (requiring senior talent and long development times), but clients still negotiate extended terms. The COVID-19 shock and economic uncertainty have made companies more cautious with budgets, often stretching existing funds. In that climate, contracts rarely enforce strict payment terms, and many agencies feel unable to demand upfront fees for fear of losing business.
The result is a dangerous feedback loop: agencies and freelancers work on tight margins, frontline staff are usually paid before the agency collects, and any delay can push firms into crisis. Casson notes, “No business wants to part with cash until they absolutely have to… suppliers wait 120 or 150 days to get paid. It’s free financing for them,” he says. “Until you’re doing £50M-plus [in revenue], you’re on your own.”
Reform and Resilience
Scott Balmer
Stakeholders are calling for urgent reforms. In the UK, the government’s 2025 Small Business Strategy included major late-payment measures: mandatory 60-day payment terms (falling later to 45 days) and automatic statutory interest on overdue invoices.
This is a direct response to campaigns by freelancer and SME groups. Similarly, the new 2023 Procurement Act for public contracts will imply a 30-day payment term down the supply chain (even if not in the contract). The government also launched a “Fair Payment Code” (Dec 2024) – a voluntary initiative requiring signatories to meet public-sector-like prompt payment standards.
Industry participants are taking action too. Many creative agencies are adopting fintech solutions to smooth cashflow. Tools like invoice financing and automated payment tracking help businesses spot late invoices before they become crises. Trade associations and bodies are also pushing for more transparency and data: for example, requiring agencies to publish average payment terms, or for creative networks to enforce their own prompt-payment pledges.
Key calls to action:
- Tighten payment terms: impose shorter legal limits (60 days or less) on how long clients can hold money.
- Enforce transparency: mandate reporting of payment performance. (In the UK, big companies must now publicly report payment practices, and US industry leaders are being pressed to do likewise.)
- Leverage technology: encourage adoption of digital cash-flow tools. Agencies can use software to automate invoicing and even sell invoices for immediate cash.
- Strengthen contracts: insist on partial up-front payments, clear penalties for late pay, and routine use of statutory interest in all markets.
Ultimately, ensuring timely payment is both a policy and culture shift. The government’s reforms (like interest on late pay and prompt-payment reporting) signal progress. But agencies and clients must also change habits: budgeting fully for creative work, committing to fair terms, and using modern platforms to manage invoices. As one industry executive warns, “cash is king… there is no one coming to save you”.
Final Thoughts
The creative industries underpin huge swathes of the UK and US economies, yet the cash-flow crisis is pushing too many businesses and freelancers to the brink. The mounting insolvencies and surveys of freelancers paint a clear picture: talent alone isn’t at fault, it’s bad payment practices. Unless payment cycles are reformed, the whole sector risks losing agencies and freelancers like myself to avoidable bankruptcy or exodus.
On both sides of the Atlantic, positive steps are in motion (tighter laws and new financial tools), but they must be matched by industry will. Prompt payment isn’t just fair – it’s the lifeblood of creativity. Ensuring that, with oversight and innovation, is the challenge ahead.
